The document analyzes the Indian automobile hatchback market, which accounts for over 70% of passenger car sales. It divides the market into segments - A, B, and B+. The A segment focuses on entry-level cars priced under Rs. 3 lakh. The B segment sees more options and features in cars priced from Rs. 3-5 lakh. The premium B+ segment for cars over Rs. 5 lakh is growing due to more affluent buyers. Overall, the analysis suggests new hatchback launches focus on competitive pricing while delivering on efficiency, space, and value to succeed across the various segments.

1. A Detailed Analysis of the Hatchbacks in the Indian Automobile Market
(An Independent Study)
August 2010

2. THE INDIAN HATCHBACK
 Participants
 A Segment
 B Segment
 B+ Segment
 The Way Forward
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3. A hatchback is an automobile designed such that the boot is integrated with the cabin space.
Chevrolet Fiat Ford Honda Hyundai
• Spark • Santro
• Aveo U-VA • Grande Punto • Figo • Jazz • i10
• Beat • i20
Maruti Suzuki Nissan Skoda Tata Volkswagen
• 800
• Alto
• A-Star • Nano
• Micra • Fabia • Polo
• WagonR • Indica Vista
• Zen Estilo
• Ritz
• Swift
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4. The A-Segment covers entry level hatchbacks. These cars make for great city drives and are the first
stepping stones for people graduating to cars. They usually feature sub 1 liter engines, are under 4m
long and are priced between 1 to 3 lakh Rupees.
Competitors
The Maruti Suzuki Alto The Maruti 800 was the car The Tata Nano, the cheapest
succeeded the Maruti 800 as that brought 4 wheels to car in the world, has
the king of hatches. The car India. It retains a strong definitely generated a lot of
continues to be a favorite emotional relationship with interest. Waiting periods ran
with buyers, as it continues the customers and continues into months as the public
to clock the highest sales to woe its faithful followers. queued up for a piece of the
figures across segments. Nano pie.
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5. Despite featuring only three cars, the A Segment accounts for 25% of total hatchback sales.
Source: Press Releases
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6. Value-for-money is the key to success in this price-sensitive segment. Fewer variants are offered
with concerted efforts to keep base pricing as low as possible.
Note: 1Ex-Showroom Price (Delhi) as on 7th August 2010
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7. The small engines and low weights allow these cars to be very efficient.
Source: Society of Indian Automobiles Manufacturers (SIAM)
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8. Source: Company Websites
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9. • The entry level hatchback segment has been ruled by Maruti for decades now. But
the Tata Nano has been able to rake in very good numbers as well. As customer
confidence grows in the Nano, one can expect better sales.
• Keeping the vehicle well priced, for the very price-sensitive entry level, is the key to
initial success.
• Keeping the ownership costs low, in the form of maintenance , spares cost, and
efficiency is again of prime importance.
• Buyers in this segment would rather compromise on interior quality, ride comfort,
and driving pleasure, than on the price, space and the VFM factor.
• Having a well-established service network helps alleviate maintenance worries,
which are a carry forward from the 80s and 90s.
• Honda is developing an A segment offering
Upcoming • Bajaj and Renault-Nissan are developing a 1 lakh INR car to counter the Nano
Launches • Maruti might launch the Cervo in 2011
• Hyundai plans to launch an 800 cc car in 2012
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10. The B-Segment covers above entry-level hatchbacks. These cars perform best during city drives and
afford most creature comforts deemed necessary by today’s customer. They usually feature 1 to 1.2
liter engines and are priced between 3 to 5 lakh Rupees.
Competitors
The Spark, a rebadged Matiz, The Beat was launched by i10 has been a raging success,
has created steady sales for Chevrolet with the hope that taking off from where the
the last few years. The looks it would change their Santro left. It is the market
make it a favorite with fortunes. While that hasn’t benchmark for quality and
women and the maintenance happened, the Beat has practicality. It has really
packages make for a value definitely generated interest strengthened Hyundai’s
offering. with its unique design. position in India.
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11. Santro, the victor of the The Indica Vista was a
hatchback war of 1998, has welcome change from the
seen many successful years. erstwhile Indica. With an
Even though the car is simply effort to move away from the
outdated now, it continues to taxi image, Tata gave it a new
sell decent numbers. name, new style and tried to
give it a personal car touch.
The Wagon R has always
been hugely popular in India.
With its new avatar, a new
engine, new interiors… it just
got better. Being the chart
topper for July is no surprise.
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12. A Star, or the Alto to the rest The second generation of the
of the world, was the car that Zen Estilo saw it losing some
introduced us to the K10 of the character it was earlier
engine which powers all A criticized for. Although, it still
and B segment cars for does not rake in huge
Maruti today. The pricey car numbers, it is a respectable
has not seen chart burning performer as far as sales are
sales. concerned.
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13. The B-Segment cars post sales of about 60,000 units every month! Launch of the
new Wagon R
propelled sales
Source: Press Releases
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14. Companies offer a large range of variants, from basic to luxury, to target a larger audience.
Note: 1Ex-Showroom Price (Delhi) as on 7th August 2010

15. Most ‘B’ segment cars are tuned with a focus on efficiency.
Source: Society of Indian Automobiles Manufacturers (SIAM)
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16. Source: Company Websites
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17. • Dominated by Maruti, with 4 offerings in the segment including the recently
launched Alto K10, the B segment is a lucrative market to tap. This segment has seen
quite a bit of activity recently.
• The keys to success remain the same as with the A segment, with fuel efficiency and
reliability taking the crown.
• Customers look for a few creature comforts as well, and good interiors coupled with
a stylish design can pull in the younger buyer.
• Mostly these cars find use in the city, hence ease of driving and good efficiency are a
big advantage.
• The general absence of diesels in this segment can be one of the ways to enter the
market. The bottleneck remains the cost of development and deployment for small
capacity diesels.
• Fiat India’s small car
Upcoming
• Hyundai i10 and Santro diesels
Launches
• Volkswagen UP
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18. The B+ Segment covers the entire range of premium hatchbacks. These cars are just at home on the
highway as they are in the city. Most new hatchbacks are launched in this segment. They usually
feature engines above 1.2 liter and are priced between 4 to 7 lakh Rupees. Undoubtedly, with the
Indian buyer getting richer, the B+ segment is where all the action is.
Competitors
The Ritz was launched in May The Swift has been a rage in i20, Hyundai’s offering in the
2009 as a conservative India ever since its launch. A B+ Segment, has introduced
alternative to the hugely powerful yet fuel-efficient car the Indian middle class to
popular Swift. The car has that meets everyone’s quality. With interiors shaming
been well-received despite requirements; the Swift cars two segments above, the
the oddball rear as it proves makes up for almost half the cosmopolitan Indian is ready
to be a practical choice. cars sold in this segment. to pay the premium.
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19. Chevrolet’s initial attempt to Figo, Ford’s latest offering, has
capture the market, in the certainly created a blast in the
form of the Aveo U-VA, market. The car is viewed as
pretty much failed. The car value-for-money and has been
was never bang-for-buck, clocking more numbers than
despite its roomy interiors the rest of the Ford lineup
and well-sorted ride. combined.
The Grande Punto rescued
Fiat in Europe. It hasn’t been
able to do the same in India
yet. The beautiful car does
well on most counts, but
Fiat’s old reputation is an
albatross around its neck.
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20. The Polo had been the most Honda’s Jazz is another car
‘looked forward to’ launch this that has seen very poor sales
year, and it didn’t disappoint. owing to its irrational pricing.
Offering the hatch buyers a With most SUVs coming
shot at owning a ‘real’ cheaper, the ‘space’ sales
German car; Polo saw heavy point never really struck a
bookings, but few deliveries. chord with the public.
Skoda’s Fabia was never a
numbers player in the
market. Marred by
unfortunate glitches and an
inflated price tag, this
deserving car never really
took off.
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21. The B+ Segment is attracting all companies, with almost all fighting for a piece of the premium
hatchback pie. Figo moved to the
2nd place within a
month of its launch.
Source: Press Releases
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22. B+ segment car prices often compete with entry level sedans’.
Note: 1Ex-Showroom Price (Delhi) as on 7th August 2010

23. Diesel hatches are favorites for people looking for economical long-distance city rides.
Note: 1Ex-Showroom Price (Delhi) as on 7th August 2010
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24. Hyundai’s ‘Kappa’ engine leads the pack in fuel efficiency.
Source: Society of Indian Automobiles Manufacturers (SIAM)
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25. The premium diesels offer stunning fuel efficiency coupled with the low cost of fuel.
Source: Society of Indian Automobiles Manufacturers (SIAM)
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26. Source: Company Websites
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27. Source: Company Websites
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28. • The B+ segment is where all the action is. Maruti again maintains a strong hold with its
dual offerings: Swift and Ritz.
• The customer here is usually buying his second car, specifically for the city, or is an
experienced buyer.
• Important factors can range from exclusivity, premium image to practicality and reliability.
• With a wide range of customer audience, positioning of the vehicle vis-a-vis the right
customer bucket is essential for success.
• This diversity is illustrated by the success of Ritz, Swift and Figo which play on the VFM
factor.
• On the same level, premium offerings like the Polo and i20 are tapping into the market
share as well.
• Pricing is a factor that must not be ignored as has been clearly illustrated by the Jazz’s
inability to rake in numbers.
• Toyota Etios
Upcoming • Volkswagen Golf
Launches • A revamped Swift with a new engine and exteriors
• A revamped Chevrolet Aveo U-VA with a diesel variant
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29. • Currently hatchbacks account for over 70% of all passenger cars sold and the segment is
growing at rate above 30% annually.
• A Segment
 Competitive pricing and providing the basic necessities are of key important.
 New launches should focus on keeping costs low, without compromising on – fuel
efficiency, space and safety.
• B Segment
 New launches can look to differentiate themselves on features, practicality and
comfortable ownership, apart from maintaining competitive price points.
• B+ Segment
 Higher than expected sales speak for the acceptability of the premium hatch.
 New launches must come across as viable alternatives to sedans and should offer:
 Suitability for city driving along with the advantages of sedan-like space.
 More customers are looking for safety features.
 Focus should be on either premium or practicality.
 Good quality and performance at a reasonable high price is accepted by a niche
but ever-growing customer base.
 Value-for-money and practicality will continue to be of prime importance to the
majority of Indian buyers.
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