Yes, Redi-Go is an 800-cc car. Come to think of it, there are four 800-cc production cars on the road today - apart from Redi-Go and Alto, there is Hyndai's Eon and the smoking hot Renault Kwid, launched on May 20. All of them are priced below Rs 3 lakh - at least their base versions are. If you count the 600-cc Tata Nano, plus the old M800s and Santros that their wistful owners have refused to part with and are still plying, then we have seven car models with engine capacity 800 cc or less on the roads.
That's more than at any other time in India's young - hardly 30 years - modern automobile history.
But the point is - the renewed interest in the segment is probably a decade or more late. I can't figure why companies would not target the bigger, faster-growing compact car segment instead.
Let me explain.
I remember meeting H.S. Lheem, then CEO of Hyundai India, in mid-2009. At that time, the on-its-last-legs Maruti 800 was selling about 2,500 cars a month on average, a far cry from its peak of about 16,000-20,000 cars a month achieved in 2002 and 2003. Alto was the top seller across industry with about 18,000-20,000 cars sold per month, much of it driven by its 1-litre version. The only other cars that were selling more than 10,000 units each month were Maruti's own WagonR, Tata's Indica, and Hyundai's i10, which was a recent launch and was driving the company to 30 per cent annual growth. Significantly, none of these cars was 800 cc.
The tall and suave Lheem said during the meeting that Hyundai was developing an 800-cc car to take on Alto's market leadership. Journalists love a scrap, so I was thrilled that an Alto competitor from the No. 2 car maker would hot things up in the industry. About a month after I met Lheem, Tata's Nano started delivering with much fanfare. It was expected to swarm the country and become the true challenger to Maruti, but a combination of factors led to its downfall (last year it sold about 21,000 units in the full year). But a common refrain heard all around was: "I don't want to be seen driving the world's cheapest car."
So, by the time the Eon was launched, two years after my meeting with Lheem, it was a different market. It had moved up, as Indians took new premium compact cars - bigger small cars, if you may - to fancy, and 'small' small wasn't fashionable any more. Despite Eon and Nano, and the mighty Alto, the share of that segment of the country's car market has steadily, and surely, fallen. And the slide has only hastened in recent times.
In the past five years, the share of micro and mini cars - as classified by the Society of Indian Automobile Manufacturers - in the passenger vehicle industry's sales has fallen from 30.4 per cent in 2010/11 to 20.2 per cent in 2015/16. More important, the absolute demand has also fallen, so it's not just a point of having grown slower than the rest of the market. Both these segments - comprising Nano, GM's Spark, Alto, WagonR, Santro, Eon and now Kwid and Redi-Go - have seen growth fall almost every year over the past five years.
Together, they had sold 761,244 units in 2010/11. In 2015/16, they sold 563,644 units, a 26 per cent fall. In the same time, the compact segment - comprising premium hatchbacks such as Maruti Swift and Baleno, Hyundai i10 and i20, Ford Figo, Honda Brio, etc. - grew an astounding 43 per cent, from 833,721 units in 2010/11 to 1,190,552 units in 2015/16. Why is it astounding? Because, remember that the entire passenger vehicle industry grew 11 per cent in that time, and passenger cars overall (which don't include SUVs), grew a mere 2.6 per cent. And to have the biggest chunk of the industry outgrowing the industry by four multiples is truly, well, astounding.
Given that profit margins for the really small cars would be much lower than bigger hatchbacks, it makes one wonder why companies are making so much effort to launch cars in a sliding segment. And not targeting the exploding compact segment better.
Think of it this way. Global majors like Renault and Nissan - and possibly some others with plans - who are known for big cars, are trying to get to the bottom of India's car market. And the market leaders - Maruti and Hyundai - are doing just the opposite, with their new, sleek compact SUVs like Brezza and Creta, and affordable sedans like Dzire, Ciaz, XCent and Verna.
But then, India is known to do strange things to people and companies.
But then, India is known to do strange things to people and companies. Not that things can't change. Kwid has made a successful start. It has reportedly got orders for more than 100,000 cars already and is struggling to meet demand. Also reportedly, Hyundai is contemplating bringing back old warhorse Santro in a dazzling new avatar. Perhaps it can cash in on the renewed consumer interest that Kwid has generated for such small cars. A return to the industry's glory days of the 800-cc car, though, seems extremely unlikely.
Incidentally, my first car was a white Maruti 800. It remains my favourite.