Source: Mail Today Do Indians buy small cars because they love the convenience of small cars? The answer is an emphatic ‘no’. Although small cars make up an overwhelming 50 per cent of passenger vehicle sales, the car-buying public still associates a larger vehicle with greater prestige.
Hence the last few years have seen the creation of the premium hatchback category, and have sounded the death knell for cars such as the Maruti 800 and even to some extent the Tata Nano.
A decade ago, when one talked about the entry point for buying a car, the Maruti 800 figured high on the list. In the 1980s and 90s, people would often wait for up to five years, before their ‘booking’ got them a new car. The situation has not changed much today, and sometimes you have to wait up to nine months to get your dream car, yet the choices on offer are much more. The Maruti 800 is now not sold in cities, which need to comply with Bharat Standards IV (BS-IV), but you’ll run into it occasionally.
The diminutive Maruti 800 was the entry level till the early 21st century, but buyers today want more. They don’t want to start with an 800-level car; they want to move on to the premium hatch category, which Maruti pioneered back in 2005, when it launched the Swift. Recalls Mayank Pareek, Maruti’s Managing Executive Officer (Marketing and Sales): “When we launched the Swift initially, we had reservations because we were opening up a new, more expensive segment. But within days the Swift became a bestseller and we have not looked back since.” Other players, seeing Maruti’s success, rushed in.
One of the early entries was Hyundai’s i20, which gained brownie points for its futuristic looks and an engine that did well. The older car was replaced by the new i20 some time back. Says Hyundai Motor India Limited Director (Marketing and Sales) Arvind Saxena: “The i20 was always popular, and the new car has met with a tremendous response. There was a long waiting period for some months, but with our investments in new areas such as diesel engine manufacturing, we expect the waiting period for the new-gen i20 to come down to a month.”
When the Nano was introduced with much fanfare a couple of years ago, environmentalists screamed that it would choke urban roads, without realizing that the market had moved on. Nobody wants to buy a car that comes with a ‘cheap’ tagline.
Entry-level cars are a strict no-no; even for the upper models, people prefer to go for variants loaded with features rather than the vanilla versions. Says Deepak Kapoor of Marketing Times, a top Maruti dealership: “These days, nobody wants to look at the basic LXi or LDi models.”
Automotive retailing has come a long way in India. The entry-level envelope has been pushed in a manner that nobody wants a ‘basic’ car. The popular sentiment is in favour of at least a vehicle like the Alto or the i10 — and that too because three-box sedans are quite expensive and in many places parking is at a premium.
First-time buyers are also looking closely at the premium hatchback segment, as easier availability of finance has meant that people can now dig deeper into their pockets. Even as entry-level cars are getting reinvented into a segment bigger and pricier than before, the darling of the masses is what is classified as the premium small car. With Middle India becoming aspirational, small is no longer beautiful. It’s premium small that has grabbed people’s imagination.