Sales of bigger cars on the rise

Rupali Mathur, a 36-year-old architect based in South Delhi, is looking to buy her first car for her daily on-site visits. She is considering something like Tata Tiago or the newly launched second-generation Honda Amaze. She says that she always had a “desire to own a big car”.

April sales data from the Society of Indian Automobile Manufacturers (SIAM) shows that when it comes to buying a new car, it’s ‘bigger the better’ for an Indian consumer.

In the passenger vehicle segment, people have ditched mini hatchbacks such as Hyundai Eon, Maruti Suzuki A-Star, and Renault Kwid, etc. The sales in this segment have fallen to 48,350 in April this year from 52,298 in the same month last year.

However, a growing number of people are showing interest in compact sedans and bigger hatchbacks such as Maruti Suzuki Celerio, Hyundai Grand i10 and Tata Tiago, etc. Last month’s data shows that the sales in this segment have grown to 133,947 from 119,063 last year.

“People have already started moving away from the segment-A, and the market is already segment-B today. The reason is always the young aspiration, and that’s why everybody is aggressive on it today. Today, people want to drive SUVs and sedans,” said Gaurav Vangaal, senior analyst at global consulting firm IHS Markit.

“If you notice, there is no new innovation in the A category except Renault Kwid and Hyundai Santro.”

Segment-A cars comprise entry-level hatchbacks with an average starting price of Rs 4 lakhs, while segment-B broadly includes medium to high-end hatchbacks and entry-level sedans.

According to industry analysts, people are not only going for cars in higher segments but are choosing to buy more expensive versions within the segment.

Besides rising aspirations of the Indian middle class a reason for the trend, Sridhar V., partner, Grant Thornton India, says the carmakers have also started making feature-rich products at affordable prices. “When Amaze comes at a base price of Rs 5.59 lakhs, it’s within the reach for a lot of people. What you found in the segment-C cars is now finding its place in the segment-B. For example, airbags, anti-lock braking, alloy wheels, paddle shift, auto-wipers, etc. was usually not a feature of segment-B cars. People want features and safety-driven cars now,” Sridhar V said.

Carmakers are excited about the new shift and are looking forward to growing sales in their top-end variants. “Our recent findings show that the average driving hours have gone up to two hours per day. In such a scenario, customers look forward to more comfort of driving and convenience, especially in the traffic conditions faced in metros. Hence, customers now prefer cars that are loaded with technologically advanced features which not only provide them with the ease of driving, but also keep them connected while on the go. Additional assurance of safety, good ride quality for all occupants, and fuel efficiency are other aspects which are actively pursued by customers. In synchrony with this behavioral shift, we have seen the sales of our top-end variants grow across product ranges,” a Tata Motors spokesperson said.