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Small Cars: the need of the hour

With rise in the income levels, a large number of middle class buyers in the Indian market are all set to upgrade to four wheeler segment. The fuel efficient small cars have become need of the hour for the Indians considering their low price tags and low operational costs. One more factor that attracts the mileage conscious Indians towards these small cars is their exceptionally high mileage figures.

As per an estimate, there have been 25 new car launches in the Indian auto market in last 18 months, and out of which about 10 were small cars. Currently small car sales contribute about 70 percent of the total car sales in the Indian market.

As present, Maruti Alto is the most popular small car in the Indian market with clocking the sales of over 30,000 units per month. The Alto has become the first choice of the first time buyers in the Indian market, since the company has phased-out the iconic Maruti 800 model from the market. The car is currently available in both petrol and LPG versions and carries two engine options including 1.0L k series and older 800CC engine.

Following Maruti Alto is the Hyundai i10 that is also driving high sales numbers and has become very popular in the Indian subcontinent. The car is currently clocking about 14,000 units a month in the highly competitive small car segment.

Surprisingly, the country’s cheapest car Tata Nano is far behind in sales numbers from the likes of Maruti Alto and Hyundai i10. However, the car is currently in the reviving stage and believed to be performing as per expectations in the country soon.

Coming in a bit higher price segment, there has been a series of car launches in the compact hatchback segment in last two years. All because of high growth potential and skyrocketing demand in this segment. A number of international car makers have launched their compact hatchbacks in recent past including Ford Figo, Volkswagen Polo, Nissan Micra, Toyota Etios Liva, etc.

Moreover, a number of car makers are ready to mark their debut in the Indian auto market with new small cars. For instance, Honda is all set to launch Honda Brio hatchback in India in the upcoming Diwali festival season. The second largest car maker Hyundai is also gearing-up to launch new 800 cc small car in the same period. With this Fiat, General Motors and Nissan are also planning to launch new small car in the Indian market.

The competition in the small car segment is expected to grow intense with these new competitively priced cars. The price war is on in this segment as car makers are increasing localization content in their cars so that the prices can be brought to a very competitive level.