If you are in the market for a small sedan but do not wish to break the bank for it, you may soon be spoilt for choice.
Car makers are altering their products to make smaller, cheaper entry-level sedans. Japanese auto giant Honda recently launched the Amaze, a sedan based on its small car Brio, and cut its size to below 4 metres to avail lower excise duties.
Cars smaller than 4 metres, with engine size less than 1.2 litre for petrol and 1.5 litre for diesel, attract excise duty of just 12%, same as any other small car, while the traditional sedans fall under the 24-27% excise duty bracket. The difference in price in some cases can be as high as Rs 80,000, a significant amount in a value-conscious market.
“The demand for sub-4 metre sedans has taken off because of their attractive price tag,” said IV Rao, executive advisor (engineering), Maruti Suzuki India.
“The benchmark for owning a sedan has come down without compromising on space, comfort or fuel economy,” he said.
Mahindra & Mahindra, for example, is chopping the boot off its only passenger car, Verito, to bring it below the 4 metre mark. That car, Vibe, will hit the roads on Wednesday.
“Owning a sedan in India is a status symbol as consumers still attach a premium to a three box (one ‘box’ or space for the engine, one for passengers and a third for luggage or boot space) car over a compact car,” said Pradeep Saxena, executive director, TNS Automotive, a consultancy company. “We have seen the Honda City in the past outsell the Jazz and more recently the Dzire outdoing the Swift.”
The impact of these cars on the company’s sales volume has been substantial. Indigo CS helped Tata increase its sales in the mid-size sedan segment by over 80% in 2009 and 2010 while the compact Dzire’s entry last year has seen the sales of the brand jump by 30%. It is currently not only outselling its smaller stable-mate Swift, but overtook the Alto last month to become the largest selling car in the country.
The Amaze has also got off to a great start with over 30,000 confirmed bookings and a waiting period stretching more than six months, easily the best start by any Honda car in India ever.