The growth story in India is a story with few parallels in the world. Not long ago, in late 90s and early 2000s, India was just a kid on the block staring at an already-developed West and its Northern neighbour starting to move very fast in terms of GDP growth. Mid-2000s saw the pace of growth accelerate for India as well and today, we are a force to reckon with. The reason for this, apart from the policies and governments, is the rising income levels of the middle class consumers. So much so, that now there is a very distinct upper middle class and a lower middle class of them.
But, according to me, no factor can highlight the above in India than the purchase patterns of 4-wheelers (4W). 4W have always been more about social status for families in India rather than for transportation purposes. A car in home means that you are well-off. Period. It doesn't matter if you take out your car every day or once in 15 days. Car purchase has always been one of the 2 most aspirational purchases of an Indian family, the other being their own house. But this purchase of a car has seen a lot of evolutionary trends.
Not long ago, there was a distinct difference between a hatchback and a sedan. Late 90s and early 2000s had a lot of compact car models. The prominent among OEMs was Maruti Suzuki, with brands like Maruti 800, Alto and Zen ruling the roads. Other players were not behind, and Santro from Hyundai and Matiz from Daewoo were quite popular among car buyers. One of the lesser popular models was Fiat Uno in the compact car segment. Distinctly above this segment in comfort, size and luxury were the sedans with cars like Honda City, Honda Accent and Hyundai Sonata being among the top choices for buyers. Many of the foreign car makers had not tried to explore the Indian market aggressively till this time and the only prominent American brand was Ford Fiesta. Very rarely, one could also see an occasional Mercedes being driven on an Indian road.
However, things started to change suddenly during the second half of the first decade of the century. Different car manufacturers had started to take notice of the fast pace of growth in India and companies like GM, Audi and Mercedes started to put more investments in the country. One of the most important trend was identified by Maruti Suzuki in the Indian market during these years. This was the aspiration of an Indian buyer who was not very satisfied with just a compact hatchback and wanted something more. However, he was not able to afford a City or a Civic as well. This insight led to the development of Swift, which is one of the most successful cars in the Indian automotive space. This car was longer (around 3800 mm) than the ubiquitous 800 or Alto and offered similar comfort levels of a sedan, although with a limited boot space. The success of this model opened new doors for other companies as well and thus was born a new segment called 'premium hatchback'. Hyundai launched its upgraded version of i10 in the form of i20 for this segment, Honda came up with Jazz. But none were able to catch Swift in the race of ever increasing sales. Jazz lost the battle quite early due to its high price and i20 was always the 2nd choice after Swift. However, the line had started to blur in the Indian automotive space in terms of hatchbacks and sedan.
Currently, the biggest competition to entry level sedans are the unexpected premium hatchbacks. Hyundai has launched i20 Active and i20 Sportz in this segment which compete with a Swift Dzire and a Honda Amaze, both in terms of price and looks. The Hyundai models are actually priced higher than the 2 sedans mentioned above. Toyota also has launched Etios Cross, which competes with so-called entry level sedans like the 2 models mentioned above. There are still takers for compact hatchbacks, with Hyundai Eon, Maruti Alto 800, Maruti Celerio, Ford Figo, Datsun Go, Nissan Micra working hard to capture the markets in Tier 2 and below.
So, what will be the next big change in the Indian market? We are already seeing compact SUVs being positioned between a sedan and a full fledged SUV like those from the Mahindra's stables. Models like Nissan Terrano, Ford EcoSport, Renault Lodgy, Renault Duster have become very prominent on Indian roads and companies like Maruti Suzuki are going to bring these "crossovers" very soon as well. With more foreign brands slated to come to India in years to come, and with frequent updates in designs to suit the status and luxury needs of the Indian middle class, we are set to see more models in newer segments in the Indian automotive market.
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@NishantSinha88
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