India Insight

It’s raining compact cars in India

June 18, 2009

Honda’s premium hatchback Jazz has just added to the flurry of four-wheelers crowding the ramp in the compact car segment.Indian market leader Maruti has been in the forefront here, following up its launch of the A-Star in 2008 with the Ritz (see photo) this year.This week, Fiat launched the Grande Punto, another compact car.This segment already has cars such as the hugely popular Swift, Swift D’Zire (all from the Maruti stable), the i10, i20 and Getz from Hyundai, Chevrolet’s Spark, etc.There are more in the pipeline with Skoda Auto’s new Fabia expected later this year and Volkswagen’s Polo in early 2010.And there is room for more.Auto expert Hormazd Sorabjee thinks this segment is fairly elastic and has the scope to absorb the supply.”Of course there will be a lot of competition…they will eat into each other’s share, but it will help to expand the market. And the competition is good.”Around 75-80 percent of the cars sold in India are in the compact segment – where the price varies from about 350,000 rupees to about 700,000 rupees (the super-premium compact).Within this elastic price range, the category has the cars to suit all budgets.Maruti dominates the segment because of the number of brands it has.It would be difficult for other players to dethrone it mainly because the company has got a clear head start over the others and it has identified itself as more of an “Indian” company compared to them.Few people think about its Japanese parentage. It also has the advantage of having a wider service network than the other relatively recent entrants.What do you think? Which car can end Maruti’s domination over the compact car segment in India?

Comments
13 comments so far | RSS Comments RSS

You forgot to mention one of the Best Sellers…the Tata’s very own Indica VISTA.

 

Swift is the leader and will remain leader because of its suspension, looks , service many more qualities.

Posted by jatin chopra | Report as abusive
 

With more compact cars on the prowl on the Indian roads, I hope the traffic sense too improves amongst people. Also, it would be better if cars with less environment friendly come in.

Posted by Avinash | Report as abusive
 

Nice article. :-)

 

It has to be Maruti.In in my view Maruti has got the reach and the network to penetrate deep into the Indian market. Above all the after sales network and off road service market which is crucial in India is dominated by mechanics who have worked on Maruti’s predecessor

 

Maruti will reign supreme as they do not have multiple quality levels for cars sold in different countries. Hyundai, on the other hand has three different quality standards – one for european, one for asian and one for the south east countires. Hyundai cars sold in India will not qualify for the tighter safety norms as levied by European countries.This is an opinion of an engineer who has seen the designs of the vehicle thoroughly.

Posted by Karthikeyan | Report as abusive
 

ya exactly. small cars are more affordable and so they are widely preferred.

 

I think Mahindra has done a great thing by introducing a car like Xylo for a small car’s price. Xylo sales are shooting through the roof and the reason is that when you get a full fledged MUV for the same orice of a sedan or hatchback, then why go for a smaller car? the sheer practicality and low price of Xylo has worked for it.They promote the brand well also. Yesterday i played the Xylo Colour Contest. You just have to coose your favourite Xylo colour and complete a slogan and you can win Holiday Packages from Mahindra Holidays. i think everyone should try theior luck. Gon to http://www.mahindraxylo.co.in/shoppe_con test.asp#

Posted by Suresh | Report as abusive
 

Compact cars are nice for cities where it is hard to find parking. For additional coverage on auto companies, consider http://invetrics.com with news bites relating to the financial aspects of it.

Posted by Michael | Report as abusive
 

I am very excited with the coming of Maruti Getz. I believe in Maruti.********************************* ****************Jamesforest21sapience

Posted by jamesforest21 | Report as abusive
 

Auto Financing is some of the most common loans in the lending industry. Many people do not get the best auto loan available to them.

 

The range has increased now with Honda Brio, Toyota Liva, Tata Vista, Beat Diesel as strong contenders in the compact car segment. Price, features on http://www.mycarhelpline.com

Posted by mycarhelpline | Report as abusive
 

The Maruti Swift is a legend in its own right for it is the single most sold car in India. The new Maruti Swift takes forward everything you expected from the earlier model.

Posted by sukhwinder | Report as abusive
 

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