Business Today

Year of the 'big' small car

There is now a growing class of buyers who want a small car — but not one that is your typical small car. And the car-makers are only too willing to oblige.

Kushan Mitra | Print Edition: January 10, 2010

For the automobile sector, 2009 will probably be remembered as the year the Tata Nano took to Indian roads and small cars continued to dominate sales. Six out of every 10 passenger vehicles sold in India (including utility vehicles) were small cars in 2009. But guess what? The small car market itself is fragmenting, and not just towards ultra low-cost cars such as the Nano. There has also been a surge of demand for "big" small cars such as the Hyundai i20, Honda Jazz and Fiat Grande Punto.

 The Ford Figo and Volkswagen Polo will be the big launches of 2010.
 New entrants such as Volvo-Eicher will launch products to break Tata Motors' hegemony in the commercial vehicles market.
 Wait for high-performance two-wheelers from Ducati and others.

The sudden rise of this segment has to do with, of course, the availability of such vehicles and the fact that some customers are willing to pay a premium for such vehicles. The Honda Jazz and the popular top-end variants of the i20 and Punto cost upwards of Rs 7 lakh, more than a Swift Dzire, Tata Indigo, Hyundai Accent, Renault Logan or a Ford Ikon.

Some in the auto industry see this as a growing trend because car-buyers are losing their fixation with the "boot", where a three-box car was seen as a status symbol. In city commuting and particularly while parking both at home and in commercial areas, a smaller car has benefits that no three-box car can match.

That is not to say that this segment isn't about to see a price-war. Car manufacturers are launching vehicles to cater to this market. So, watch out for several new launches in this category in 2010.

This was also the year that saw the entry of Harley-Davidson, Ducati as well as superbikes from Suzuki and Yamaha into India, bringing in brutal doses of horsepower at a high cost. As this segment, too, grows, expect other high-end motorcycles to be launched in India through the year.

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