On an overall basis, sale of passenger vehicles may be growing at a great speed, but those of small hatchback cars are seeing a sharp decline.
The numbers tell the story: during April-October of the current fiscal, sales of small hatchback cars dropped 41.2% to just 93,607 units, from 159,066 units in the same period last year, as per Society of Indian Automobile Manufacturers data.
Of these, sales of Maruti Suzuki’s small hatchbacks (Alto and S-Presso) dropped 40.3% — from 145,992 units in April-October 2022 to just 87,118 units in the same period this year — and those of Renault Kwid dropped 50.4% (from 13,074 units to a mere 6,489 units).
However, during this period the overall passenger vehicle (PV) market grew 8.3% from 2,227,917 units to 2,412,337 units.
Although slower than the PV market, sales of small hatchbacks were growing — from 124,822 units in April-October 2020 to 141,977 units in April-October 2021 to 159,066 units in April-October 2022 — before dropping to 93,607 units this year.
This drop happened despite Maruti Suzuki launching the all-new Alto in November last year, which was expected to attract a lot of first-time car buyers.
“Instead of hatchbacks like the new Alto (priced in the `4-5 lakh range), it appears a lot of first-time car buyers are now shifting to second-hand small SUVs that are marginally expensive,” an analyst told FE. “While most new sub-4 metre SUVs cost `7-8 lakh and above, used SUVs can be had for `5-6 lakh or lower.”
Ruchit Agarwal, co-founder & CFO, Cars24 — a pre-owned car company — confirmed this and said that even though the demand for used SUVs was there earlier as well, there wasn’t enough supply. “Over the past couple of years, sub-4 metre SUVs that were launched during 2016-19 are coming into the used car market, and buyers are increasingly having better choices,” he said.
Sales of small hatchbacks like the Alto are also impacted by bigger hatches like the Wagon R and Swift. The price difference between an Alto and a Wagon R isn’t substantial — about Rs 2 lakh, variant to variant — and feels even less when it comes to EMIs. For example, the EMI on the Alto K10 VXi on Rs 1 lakh down payment over five years is Rs 9,600, while the same on the Wagon R VXi is Rs 11,700.
“The Wagon R and Swift feel much more premium,” another analyst said. “That’s the reason these are among the top-selling new cars. In October 2023, the Wagon R was India’s best-selling car, with sales of 22,080 units, followed by the Swift (20,598 units), Tata Nexon (16,887 units), Maruti Suzuki Baleno (16,594 units), and Maruti Suzuki Brezza (16,050 units).”
While the Alto’s sales are dropping, it remains India’s largest-selling car cumulatively –- having crossed the 4.5-million-unit sales mark this year (it was launched in 2000).
