GST might finish the Compact Sedan tax break but the cars are getting better
Once upon a time, when the Indian car market sold well under a million vehicles a year, there were several truisms for journalists who wrote about cars either in the motoring media or the business papers. One of those truisms was that Indians love a car with a boot, basically a sedan. It was a sign of having arrived socially and economically. When Hyundai’s Getz bombed on the marketplace, as the first premium large hatchback on the market, it added fuel to the sedan fire.
Then a couple of things happened. The first was that the government gave cars below four metres in length and small engines a tax incentive. And the Hyundai i20 came on the market. The latter proved that consumers were willing to pay for large premium hatchbacks and today the i20 and the Baleno are two of India’s top-10 best-selling cars. With a tax break, and when there is a tax incentive, miracles can happen overnight in the corporate world. And that miracle was discovered by Tata Motors, who chopped off the behind of an Indigo and called it the Indigo CS. Under four metres in length, it was meant to appeal to those who still wanted a boot on their car but a slightly cheaper one.
Maruti went a slightly different direction initially, they added a boot to the Swift but the first generation Dzire was much longer than four metres. And while Maruti managed to keep costs down thanks to their manufacturing efficiencies and distribution reach, to truly take advantage of the “compact sedan” market, they needed something else. Thankfully by the time Maruti had developed the first-generation Dzire, the second generation Swift was around the corner. long story short, Maruti’s engineering team promptly went to work on developing the second generation Dzire and kept it below four metres in length.
It would be correct to say that the Dzire, particularly the second-generation Dzire, was a massive hit. The company puts total sales of the car at an astounding 1.38 million in the past decade and sales exceed 200,000 units annually. While Maruti executives do not say this out too loudly, the massive increase in fleet and commercial sales, thanks to the advent of Uber and Ola over the past two years, has taken the Dzire to new heights on the sales front.
Next week Maruti is bringing the third-generation Dzire on the market. There are some unique aspects to this car developed largely in India. The first is that the new Dzire is coming on the market ahead of the third-generation Swift. Possibly because Maruti has its hands full with Ignis and Baleno sales currently. The second is that the third-generation Swift actually looks kind of decent, not like your average “compact sedan,” which looks as if the engineering department took a meat cleaver to the designer’s vision. We will drive the new Dzire in a couple of weeks and will get back to you on that car then.
For now we look at another compact sedan that was recently refreshed, the Hyundai Xcent. There is a reason Hyundai did not revive the “Accent” brand in India, as the Verna is called the Accent in the US market but both the Xcent and Dzire are names that could have only come during a marketing offsite where far too much alcohol was consumed. Hyundai has also given the Xcent a makeover, this being a mid-life refresh, not a generation change. Unfortunately, as the saying goes “lipstick on a pig,” the source car for the Xcent, the i10 remains a good-looking vehicle. Despite the slight cosmetic changes, the Xcent still looks odd.
The new radiator grill seems slightly forced and while the taillight cluster is nicer, it still isn’t what one would describe as a good-looking car. This is not because of Hyundai, the Korean company really has upped their design game in the past few years — the i20, Creta, Verna, Elantra, Tucson and Santa Fe are all great-looking cars. But like most compact sedans, the Xcent is not a looker. But I must qualify that statement; the new Dzire is definitely the best-looking Dzire ever and full marks to Tata Motors for the Tigor’s looks while the Ford Aspire looks alright.
But Hyundai; which as you know sold many lakhs of Santros, a positively not pretty car; knows that and have worked on the Xcent interior. You get Apple CarPlay and Android Auto, a better air-con with rear-vents. The Xcent diesel that we have been driving the last couple of days was decent to drive in the city even though I miss an automatic. But with the new Dzire around the corner, this car will have challenges convincing consumers.
That is also because that lovely tax loophole that allowed sub four-metre cars to get away with it. Well, GST could see that come crashing down because larger sedans might not attract a tax penalty. And while these small sedans will continue to be cheap, they might not be around for much longer. You would rather buy a bigger hatchback or a larger sedan and not some compromise even as designers finally get their heads around the concept. But this motor noter will note this much, it is almost impossible to predict the Indian market. Maybe we have become attached to these odd stunted cars. Two million of them in a decadeIJ Who am I to argueIJ