The passenger car market of the Indian auto industry has developed at a good pace, in contrast to the situation of a decade ago, the time when Maruti 800 and Ambassador were leading the whole scene. Presently, the Indian market is flooded with a large number of options, right from the ultra-competitive car Nano to renowned luxury Rolls-Royce. Industry experts believe that the buyers in market are now spoilt to select a model from the large number of brands, variants and segments. Every now and then overseas auto makers are bringing novel innovations in the country and in some cases, have developed completely new segments as well to pull the masses.
Since the launch of Maruti 800 in 1984, India has been a predominant market for small cars. Maruti Udyog Limited, now known as Maruti Suzuki India Limited, understood the psychology of Indian buyers and launched compact car models, which were demanding low maintenance cost. Adopting the same strategy, Hyundai and Tata Motors joined the league by introducing small economical cars. And now, after almost one and half decades, the Indian market is flooded with around 3/4th of the small cars because of the increasing demand. In fiscal 2012, the small car segment accounted to almost 78 per cent of the overall passenger car sales.
Increase in the level of income and availability of financing options have mainly driven the growth in small car sales during the last one decade. Besides, factors like lack of organised parking structure and narrow roads, among others have also influenced the Indian buyers to generate a penchant for small cars against bigger models.
Auto makers mainly targets entry level buyers with small cars and since Indian auto market is developing swiftly, Original Equipment Manufacturers (OEMs) upgrades their products regularly by offering new models in the market. Reportedly, in 2006, Maruti Suzuki came up with a new model, Swift, which developed a new sub-segment known as premium compact segment in small cars. The launch came as a successful model and thus, a potpourri of vehicles was targeted at the new segment, including the launch of Skoda Fabia, Hyundai i20, Ford Figo, Honda Jazz, New Indica Vista and Fiat Punto, among others, within a couple of years. Interestingly, all the models were strategically priced between small and mid-size cars; between Rs. 4.5 and Rs. 6.5 lacs.
Thereafter, the auto makers came up with compact Sports Utility Vehicle (SUV) segment, BMW heading the bandwagon with the launch of X1; however the car was introduced as a premium compact SUV. Following the success garnered by German auto maker, car makers like Premier, Renault and Mahindra introduced their innovative models in the newly formed segment. Renault is credited as the most beneficial auto maker, which made its fortunes in this segment as the Duster model was a hit with 6000 bookings just after five days of its launch. In order to replicate the same story of success, Mahindra also recently introduced its Quanto, which is said to be a smaller version of Xylo MUV. With the development of this segment, auto makers are trying to connect the premium hatchback and entry-level sedan segment, as a compact SUV shares its credentials from both of them.
A fact to note here is that the foreign luxury auto makers are also aware of this trend as Mercedes-Benz, the brand which needs no introduction in auto industry, introduced its B-Class Sports Tourer in Indian market. The model happens to be a perfect blend of luxury and performance, packed within sleek dimensions. Although the model was heavily priced between a price bracket of Rs. 21 lacs and Rs. 24 lacs, it was warmly accepted by the Indian buyers. Success of the model can be easily judged by the fact that before its actual launch, the first consignment was booked and the new orders will be delivered in next year.
