Why small cars sell more than the big ones

The passenger car segment in India have never had it so good with the car sales touching the 2.4 million mark and all this courtesy small cars. India’s largest car manufacturer, Maruti Suzuki themselves accounted for more than 1.3 million cars and come to think of it, Maruti is known as the master of making small cars in India. Maruti Suzuki cleared the doubts among car lovers – whether they would still be the market leaders in India or not. The Indian car market is touted to be one up on the Brazilian one and this means that we would grab the 6th spot in the world of automobiles. A 30 percent growth from the small car segment was witnessed and at the same time, India’s luxury car market touched new heights. Affordable (in the term of luxury car makers) cars like the BMW 5 series and X1 made their way into many Indian homes. The Audi Q7 also reported decent numbers and its smaller variant, the Audi Q5 also posted healthy sales figures for the German manufacturers. An economy which is growing at a rate of 10 percent coupled with higher incomes and easier loans ensured that the luxury car market sold about an estimated 18k units in 2010-2011 which translates to an all time high of 80 percent increase from 2009-2011.

The best performer of 2010 was however the small car, the Ford Figo. That the Figo managed to outmatch its competition even without having any discounts on its speaks volumes for itself. Launched last summer, the Figo registered bookings of over 8k cars in a month. At the end of the year, the Figo had raked in 78116 units. In the overall sales ranking, Ford India came to a respectable number 6 from the pathetic number 8 that they were earlier. For boosting the sales of Figo and ensuring that the customers need not suffer a waiting period, Ford India started a second shift. Earlier on, the cheapest car in the world, the Tata Nano got a boost in its sales with waiting periods being reduced and the Sanand plant running in full steam. Sales touched an all time high of 9000 units in July however a few reliability issues and some fire incidents ensured that the sales of this car slowed down. There was a pathetic stage in the sales of the Nano when it touched an all time low of only 509 units in November 2010. However Tata Motors quickly swung into action with the 4 year warranty deal and also offering the remedial action that no further damage would be done with the fire catching incidents.

This small segment as a whole continues to remain the largest part of the market by smashing the million mark and above, which is up by about 35 percent from the figure shown in 2009-2010. Key launches like the ones of the small cars like Figo, Polo, Wagon R, Micra and the Alto K10 made way for the growth of car sales and especially small cars. The best selling car was the Alto K10 with over 3.4 lakh units, which is a 48 percent increase over its previous year’s figures. Next up is another Maruti which has taken the second spot from the Hyundai I10 and that is the Maruti Wagon R, which witnessed sales over 12 percent more than the previous year. The Hyundai i10 in the meanwhile witnessed a sales rise by over 10 percent while its bigger and fatter cousin, the i20 witnessed a boost of 100 percent to about 86 k units. This good show by both its models helped the Korean company to retain its number 2 position in the Indian car market. Tata Nano sales spurts always ensured that Tata Motors were a close third as far as the sales figures go. For the American General i.e. General Motors, sales of its small but ultra funky car, the Beat ensured that the numbers were boosted in multiples however the cheeky little Spark’s sales toppled down by 20 percent. Fiat showed a lackluster display with the sales of their Punto hatchback dropping by 5 percent indicating that manufacturers need to keep the pot burning for their cars.

The new midsize entries like the Volkswagen Vento and the Toyota Etios received a warm welcome from the car buying public and this enabled them to get off to a good start. In only 6 months, the Vento has clocked in more than 18k units in the domestic market. The Etios which was launched at around the year end managed to garner over 30k bookings however with production facilities in a sort of tizzy, managed to sell off only 8k units. Strong performance by the Vento meant that the Honda City sales could rise only 3 percent of what was sold last year. However in March 2011, the Vento managed to go one up on the City. Honda finally realized that it needs a diesel engine in its Indian car lineup as India is predominantly a diesel driven country. Due to a huge price cut and also nifty ad campaigns, the Mahindra Logan has seen its sales being doubled. Recently the car has been renamed as Verito with a lower asking price and added benefits of more goodies. Moreover, Mahindra is latching onto the idea of reducing the boot size of the Logan and ducking it under the 4 meters mark to gain excise benefits and further lower the price of this car to gain a good market share. Due to the introduction of a much needed diesel under the hood of the Toyota Corolla Altis, Toyota Motors managed to get a 10 percent increase in their sales. However due to the capacity constraints in its manufacturing facility, Toyota could only manage to grab 10 percent increase in sales. The Chevrolet Cruze, saw a 100 percent bump up in its sales figures compared to the year 2009, with sales of about 9,040 cars.

Well, if you thought that only compact cars were the stars of the day, then take a look at the luxury car market also. The Mercedes C class finally managed to steal one from the BMW 3 series by clocking in 2614 cars in the entire year. However BMW fought back with the much more expensive 5 series contributing to 3k units plus. The BMW X1 which is one of the lowest priced BMWs in India made a solid start to its innings in India with 525 units being already sold for an SUV which made its debut in December 2010. The silent player in this game, Audi managed to sell well over 1000 units of the Q5 and also the Q7. This was the highest amongst the SUVs in this segment. The market is showing no signs of slacking over however trade pundits say that there are chances that the market would chill a bit after all this show. However money spinning models from Maruti, Tata and Hyundai are expected to hit this year and who knows if the pace would be maintained or get to the next level.

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