Even as most segments in the domestic passenger car industry including utility vehicles are witnessing a decline in demand, the mini car segment that comprises of the Maruti Alto, Wagon R, Hyundai Santro and Eon, has witnessed a surprising growth in the first four months of this fiscal.
The segment grew by 6.5% to 180,085 units between April and July this year, at a time when the overall passenger car segment has declined by nearly 10%.
Even the compact car segment, which comprises the bulk of other small cars such as the Maruti Swift, Ritz, Hyundai i10 and i20, Ford Figo, Honda Brio, Volkswagen Polo and Toyota Etios Liva, saw sales decline by over 10% during the same time.
“There is definitely a trend that the mini car segment is witnessing an uptick in demand,” said Vishnu Mathur, director general, Society of Indian Automobile Manufacturers. “I think the entry-level car consumer is returning to the market as he has waited long enough. The discounts in this segment are also very high so the feeling is there is no better time to buy a mini car.”
The maximum growth has come for Wagon R, which has seen a 31% growth over last year, followed by the Eon, which grew by 15% and the Santro a more sedate 6%. In contrast bigger and more expensive compact cars such as the Figo, i20, Swift and Polo have seen sales decline by 40%, 25.3%, 12.1% and 1.4% respectively.
Manufacturers said a large chunk of demand for mini cars are coming from small towns and rural parts of the country. For example, around 45% sales of Hyundai’s entry level small car Eon comes from rural and semi-urban markets.
“Even though the demand for cars is sluggish, our rural sales has grown by 20% this year,” said Mayank Pareek, chief operating officer, marketing, Maruti Suzuki India Ltd.
“That demand is reflected in the higher numbers for these cars. We are also increasing our penetration in the countryside and hope to cover 100,000 villages this year. There is lot more optimisim in rural markets than in urban centres.”