New and emerging segments in the Indian Automobile industry

Now coming: Cars we always wanted on Indian roads!

Updated: 09/04/2012

CarToq decided to look at cars across buyers segments and assess if there are some buyer needs that not being met by car manufacturers currently.

We also then identify new launches that are likely to fill the gap. Here’s our analysis.

Diesel automatic cars within Rs. 10 lakh

A sizeable amount of Indian car buyers are opting for diesel cars as the running cost of diesel vehicles is lower than that of petrol cars. But a diesel car buyer doesn’t get enough options to choose from especially if he is looking for an automatic transmission in either the hatchback or the sedan segment.

Diesel cars with automatic transmissions will have two main advantages. Firstly, they will have better mileage figures and secondly, diesel automatic cars with high-torque engines will have better pulling power at low speeds. This would make for an effortless city driving experience in slow-moving city traffic.

hyundai verna front photo
Photo: The new Hyundai Fluidic Verna stands alone in the diesel automatic under 10 lakh category


Filling the void: At present, the only diesel car that comes with automatic transmission is the Hyundai fluidic Verna (Rs. 11.26 lakh).

Diesel compact SUVs

A significant bunch of consumers are looking to purchase SUVs that are practical enough for daily commuting and are capable of some off-roading  as well. Essentially what these prospective buyers want is a 4×4 system, 5 seats with adequate space, higher ground clearance, powerful engine (preferably diesel) and good handling.

new renault duster
Photo: The Duster is a classy compact SUV which may change the game for Renault in India

Filling the void The upcoming Renault Duster  to be launched in October 2012, could fill the void in the compact SUV segment. The Ford EcoSport, which is also expected to hit showrooms by the end of 2012, will have a 1.5-litre diesel motor apart from the 1-litre EcoBoost petrol engine. Premier is also gearing up to launch the BS-IV compliant, 1.3-litre diesel engine version of Rio compact SUV.

Diesel compact MPVs

The demand for cheaper diesel compact MPVs (multi  purpose vehicles) is increasing due to skyrocketing petrol prices. An entry level diesel MPV would appeal to a wider band of prospective large family buyers in the MPV segment.

maruti suzuki ertiga photo 1
Photo: Compact MPVs like the Ertiga have huge potential in the Indian market

Filling the void: Maruti Suzuki Ertiga will kick start new compact MPV segment when launched in April second week. The Ertiga will get a 1.3-litre diesel motor that puts out 90 bhp of power (used in SX4). Chevrolet India will also offer the Enjoy MPV during the second half of 2012. The Enjoy diesel will be powered by 1.3-litre XSDE motor which is GM’s version of the Fiat 1.3-litre Multijet engine.

Entry-level luxury cars

Luxury brands in India are witnessing a significant demand for entry-level cars. The demand stems from the need for an affordable yet well designed vehicle with luxurious interiors and creature comforts. And yet brand value is an important requirement. Only brands like BMW and Mercedes Benz which possess high aspirational value among Indian buyers can fill this void.


mercedes-benz b-class photo
Photo: The Mercedes Benz B Class hatch will be among the first luxury small cars from the German brand

Filling the void: The German trio (Audi, BMW and Mercedes-Benz) are all gearing up to launch smaller sedans in the country with prices ranging from Rs. 18 lakh to Rs. 22 lakh.

 Mercedes-Benz is planning to launch B-Class Sports Tourer in November 2012. The five seater is expected to be the cheapest Benz as it will likely be priced below Rs. 25 lakh. Mercedes-Benz is also planning to launch its Smart brand in India by 2014.              

Audi is exploring various possibilities to launch models in the compact cars segment and the upcoming Audi A1 could just be the right candidate. BMW is not left out in this competition, as the company is planning to introduce its MINI brand and also launch its 1-series sedan in India.

Entry-level saloons such as the Merc A-Class, Audi A1 and BMW 1-series cars will target a much younger buyer profile. These small cars will widen the customer base of the luxury car brands and create a niche segment among young high profile buyers in the country.

Entry-level luxury SUVs/Crossovers

Just like the demand for entry-level luxury cars, the demand for entry-level crossovers/SUVs in the premium segment is fast catching up. The sale of BMW X1 is a typical example of how brand image (BMW) and a cheaper price tag fulfils the needs of Indian luxury SUV buyers. In the past 2 months, BMW has sold 887 units of X1.

bmw x1 photoPhoto: The BMW X1 is a perfect example of entry level luxury crossovers

Filling the void: BMW X1’s demand may have inspired Audi as the company is planning to launch the Audi Q3 in June 2012. Mercedes-Benz, on its part, is readying a compact SUV, the GLC to take on the BMW X1.

The upcoming Audi Q3 and Mercedes-Benz GLC will likely be pitched in the Rs. 20–30 lakh price range and thus pose a serious threat to the BMW X1 crossover.