The Hindu Business Line : Small cars continue to rule the sales chart

DESPITE a string of launches in the sedan segment over the past year, it was the large-volume small car segment that saw a significant improvement in sales in the year.

Small cars (consisting of brands such as the Hyundai Santro, Maruti Wagon R, Zen and Alto among others) accounted for about 60.5 per cent of total passenger car sales in 2004-05, an improvement compared to about 53 per cent in the previous year, industry data showed.

In contrast, analysts had forecast a sizeable jump in the contribution of the mid-size sedan segment with the price difference between a premium small car and a mid-size one narrowing down.

The mid-size segment (consisting of brands such as the Tata Indigo, Maruti Esteem and Opel Corsa among others) could, however, only increase its share last year to 21.8 per cent from about 20 per cent in the previous fiscal.

In fact, the rate of growth for the mid-size segment was also lesser than in the small car segment. While the small car segment grew at 34.3 per cent to 4,96,270 units in 2004-05, the mid-size segment grew by 28.2 per cent to 1,78,730 units, data compiled by the Society of Indian Automobile Manufacturers (SIAM) showed.

"Demand for small cars is likely to remain strong with first-time car buyers driving growth for the segment. Further, as fuel prices go up, people do tend to go in for more fuel-efficient cars," an analyst said.

Meanwhile, the executive segment (consisting of brands such as the Hyundai Elantra and Toyota Corolla) improved its share to 2.7 per cent in 2004-05 from about 2 per cent in the previous year. The segment's sales, however, jumped by a sizeable 59 per cent to 22,808 units last fiscal.

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