Maruti Suzuki’s premium hatchback model Baleno may have come out strong, figuring as the country’s second-largest selling car in FY23 — it sold 202,901 units, with a 5.2% share of overall passenger vehicles — but the overall segment it represents is losing steam.
Premium hatchbacks fall in the sub-4 metre vehicle category, which attracts lower duty, and, therefore, can be priced competitively. However, compact sports utility vehicles, which are again sub-4 metre vehicles, are competing effectively with premium hatchbacks.
The market share of premium hatchbacks on an overall basis declined to 17.3% from 19.6% in FY22. In FY21, their market share was at 24%.
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Apart from Baleno, other popular models in this segment are Swift and Ignis from Maruti’s stable, Hyundai Grand i10 and i20, Tata Altroz and Toyota Glanza.
Automotive analysts FE spoke with said the sub-4 metre compact SUVs have eaten into sub-4 metre premium hatchback cars. In price terms, sub-4 metre SUVs are priced in an almost similar range as premium hatchbacks — for example, the starting price of the Altroz is Rs 6.45 lakh (ex-showroom), while that of Tata Nexon, a sub-4 metre SUV, is Rs 7.8 lakh. But Tata Punch, a still smaller SUV, starts at Rs 5.99 lakh.
“Sales of sub-4 metre SUVs such as Maruti Suzuki Brezza, Hyundai Venue, Kia Sonet, and Tata Punch and Nexon have been rising at the expense of premium hatchbacks — from 540,220 units in FY21, to 758,762 in FY22 and 1,002,864 units in FY23,” said an analyst. “In percentage terms, these have grown from 20% in FY21 to 24.7% in FY22 and to 25.8% in FY23.”
Another reason for the drop in market share of premium hatchbacks is that during FY21-23, models such as Ford Figo, Honda Jazz and Volkswagen Polo got discontinued, while during the same period sub-4 metre SUVs saw new entrants such as Nissan Magnite, Renault Kiger, Toyota Urban Cruiser and the Punch.
Gaurav Vangaal, associate director, light vehicle forecasting, S&P Global Mobility, told FE that the sheer choice buyers get in terms of models veers many a people towards compact SUVs. Today there are 10 sub-4 metre SUVs models, but only seven premium hatchback models.
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Lastly, even though models like the Baleno are seeing rising sales — from 148,187 units in FY22 to 186,733 units in FY23 — others haven’t performed well.
For example, sales of the Swift have dropped from 172,671 units in FY21 to 159,343 units in FY23, and those of the Grand i10 have dropped from 100,611 units in FY21 to 99,537 units in FY23. Even the sales of the futuristic looking Tata Altroz have dropped from 60,379 units in FY21 to just 53,949 units in FY23 — all this at a time when the overall PV market has grown from 2.7 million units in FY21 to 3.9 million units in FY23.
