The compact segment, a unique development for cars in India, has seen a major slow-down in August. While the overall numbers have stayed constant, the growth rate across a majority of the models in the segment has slowed down.
The biggest drop has come from segment leader Maruti Suzuki’s Dzire compact sedan whose numbers dropped from 18718 units in August 2015 to 15776 units in the corresponding period this year, a drop of 2942 units. This drop has come in the wake of realigning of production for the Vitara Brezza and Baleno hatchback. The Dzire has been one of their strongest models in terms of numbers and this move to scale back its production does indicate a slowdown in demand.
It is a similar story for the Honda Amaze which sold 2488 units as compared to 3260 units in the corresponding period last year. The big H’s compact sedan was launched on the strength of its diesel engine and for a long time Honda had a much higher demand for diesel rather than petrol powered models. Now with a change in preference by consumers, the company has had to realign its production to meet the change.
Surprisingly the Hyundai Xcent has seen a major jump of 1000 units as compared to 2015 and we believe that this surge has come on the back of its presence in the fleet market. The Tata Zest too has had a minor jump in numbers.
The Ford Aspire has had lacklustre sales for quite a while now and has not been able to regain the initial momentum of 5000 units per month that it saw post its launch a year ago. However, Ford has now entered in a deal with Zoomcar and the Aspire joining the rent-a-vehicle train should steady the compact sedan’s fortunes in India.
This sector may face another hurdle when GST comes into force as currently there is no information with regard to whether this landmark Bill will continue the rules and regulation of the sub four metre category.
It is possible that this slowdown in growth is also because the compact sedan segment has seen no major updates across the board. Apart from a facelift for the Amaze, a diesel AMT for the Dzire and the arrival of the Ameo (which will take a while to make a name among the established players) the segment has stayed constant.