[GrandTourer]

This video by carwow brings up a very interesting point about manufacturers preferring SUVs over cheap small cars.

https://youtu.be/7WYBR0tlPA8

In certain developed countries, carmakers like Ford have already stopped selling hatchbacks and sedans, and are selling mostly SUVs, EVs and sports cars. In the UK, Suzuki does not even crack the top 10 manufacturers:



Usually these trends start in developed markets and trickle down to developing markets over the year. In India, we are also seeing the trend of SUVs being favoured by buyers and carmakers reciprocating to it (Espresso is categorised as SUV in MS website). Now, are buyers subconsciously pushed towards SUVs/Compact SUVs as manufacturers offer better products in this category? There's not enough data. However, the question is - will carmakers eventually stop making cheap small cars in order to lift their bottomline?

In countries like India, the majority share is held by MS, which still makes cheap small cars, but with the mandate of EV by 2030, will MSIL also look to compact SUVs/SUVs in lieu of small cheap cars?

What is your take?

[GTO]

Thread moved from the Assembly Line to the Indian Car Scene. Thanks for sharing!

Voted for no. We have to realise that India is a poor country & half of our fellow citizens make ~1.5 lakhs a year. Forget cheap cars, even cheap 2-wheelers will always enjoy enormous demand in India. It's the ultimate dream.

That said, entry-level hatchbacks are definitely not a growth segment anymore. If you look at the sales charts, many first-time car owners are skipping the cheap A segment and jumping directly to the B1 & B2 models. Some are also going for C1 & C2 cars. Hatchbacks were once the dominant body style in India; they now form 1/3rd of it.

Cheap hatchbacks will always bring in the volumes, but no growth + wafer thin margins + image issues means no brand is interested in it, apart from Maruti / Hyundai / Tata.

[2000rpm]

I typed yes because I dont see and think that Alto can match up to the compliance on safety which I expect to kick-in in next few years.

If not compliance from government, the consumer demand will out grow the love for the breadbox.

[VW2010]

Cheap is a relative term. Low cost is the right term per say. We are 1.4 billion people and growing. We will have enough appetite for cars across different cost segments. While the ones visiting this forum may not fall into that bucket but low cost cars will always find buyers. It is still 200% safer than a two wheeler with a 6 month old baby hanging dearly for life.

More than low cost the market is ripe for used car purchases where people buy higher segment cars at lower price.

My Nano was sold as cheap car. It was never cheap

[TorqueMonster]

Voted for no. There will never be death for cheap and small cars at least in India. Many buyers are first time buyers of vehicles. These people need a car, but not the flashiest or feature-rich. They need a reliable car with good fuel economy. People buying these cars are mostly first-time buyers of vehicles. Most of India cannot afford to go directly to the Sedan or Crossover segments on their first purchase, for these people their necessity is to get a car that can carry their family, before eventually upgrading when the finance allow.

A middle variant Alto costs 4.4 lakhs in my hometown. It is still a huge sum of money for an average family in India. Indian's see cars as a status symbol and usually do not buy cars used to, so this can be another reason why new cheap cars sell a lot more.

Hence, as far as there is a rise in living standards of people, with people moving from cycles and two-wheelers to owning their own cars, there will always be a demand for cheap hatchbacks.

The only drawback which we can see is that except for the very few people wanting a secondary car, this segment depends on the first-time buyers, and hence with the eventual rise in living standards, this segment may suffer losses, as people may move to the more expensive hatchback/crossover segments. But for India at least, cheap hatchbacks are not going anywhere.

[sen2693]

I voted no because there could still be a market for second-car-at-home situation in cities where you want a car to drive primarily in city traffic.

[giri1.8]

Voted yes, will small cars like Alto survive? Yes, but they won't be cheap after few years, thanks to all the proposed regulations! We still have Bs6.2, CAFE norms, flex fuel, more mandate safety features and so on. Makers will have no other choice but to hike the price.

[Storm2.0]

Car is an aspirational product in India and there is a massive population who'd be able to afford only these humble entry level cars with the limited disposable income they have.

[Kannan]

No, I don't think so, not at the least from an Indian perspective and the simple reason is driving within the city and parking space.

Certainly, people are preferring larger cars, but then I have many friends who decided to choose smaller cars but then the options of decent looking once were not there and hence they chose something from the Compact SUV range. Most of their primary usage is within the city than the highway.

[dhanushs]

Voted NO. Budget aside, Just think if the need for a (1)Small, (2)Fuel efficient, (3)Cheap to maintain, (4)Easy to maneuver car will ever disappear?.

[Emvi]

Voted No.
I foresee 'small car' sales volume decreasing significantly moving forward, however I don't think the cars will be dead. We are already witnessing the trend wherein the top selling cars are not necessarily small cars or entry level cars, which used to be the case not so long ago. As already opined, first time buyers are not considering just entry level cars these days. I personally prefer a small car as my second car and so do a lot of people. Adding further, people owning multiple cars in a household is no more a rarity. With once perceived luxury features trickling down to small cars now, I am of the opinion that the cars are only going to get better in the future.

[PrideRed]

With increase in dimensions of cars(Current C segment cars are longer/wider than yesteryear D segment cars), small car definition also has to be revised. Swift/i10/Tiago/Punch are the new small car and are selling well. Micro hatches like Alto/Kwid/Celerio will see reduction in sales, most of numbers coming from tier 2/tier 3 cities and rural parts of the country.

[Carma2017]

This fad of SUV looking cars would soon fade off especially in urban centres as congestion and high fuel prices effect kicks in on a longer term basis. Although people may retain bigger and faster cars as their vacation movers, Highway drives or for show off etc, the regular vehicle of choice however (for office, grocery etc) would be a fuel efficient / energy efficient and safe vehicle. Hence the need for a smaller vehicle. I hope at least our educated junta thinks in that direction.

[Aniket Verma]

Voted No.

Cheap is an operative word and is relative to other cars available in the market.

With future proposed safety and engine options (Flex engines?), the base price of today's entry level vehicles will definitely increase.

But apart from traditional first time buyers, we now have ever increasing tribe of "Two Cars" homes with need of second economical City ride. This vehicle can be for parents, partner or even daily ride to reduce fuel bills.

Hence, there will always a market for cheap & reliable small car.

[narayans80]

'Cheap cars' shalt not sell. Tata send their regards on that

But there will always be market budget A1 segment cars. First time car owners, Newbie drivers, budget concious buyers, families looking for a second car as a city runabout. These use cases aren't going to disappear anytime. It may not grow, but not going to be dead.