Four conclusions from hatchback sales results in August

Hatchback sales in August remained flat, with no growth over the previous month. That’s 30% lower than sales in the beginning of the year. In the market with fewer buyers, as car makers try ways to woo buyers, a few interesting trends are emerging. Read on.

Discounts and schemes are helping

Santro, an ageing brand, jumped sales by 29%, selling almost 7,000 cars in August. Hyundai ran a low-interest offer (of 5.99%) on the Santro and the i10 from mid-July onwards. After falling 20% the previous month, i10 sales have crept back about 4% to 9,185 units in August. So, with the discounts, Hyundai has been able to hold its ground last month. From more details about the scheme, read our story here.

Four conclusions from hatchback sales results in August
Photo: An interest rate scheme has helped prop up Hyundai Santro sales

What is interesting is that Alto volumes dropped by 7%, or 1,800 units this month. So buyers are seeking deals, and even the market leader in this segment has seen a decline in sales in the absence of schemes and discounts. The Santro is priced Rs 25,000 higher than the Alto, so the discounts helped it woo new buyers, possibly away from Alto.

Improving value proposition also helps

The new Tata Vista that was launched at the end of last month has pushed up the total Indica sales volumes by 23% to 7,206 cars, which is a significant gain. The Quadrajet diesel variant of the car is actually great value for money, as it shares the same engine as the Maruti Ritz, Maruti Swift and Fiat Grande Punto, and is loaded with features at a relatively lower price.

Read our story on how Vista diesel variant is better value for money than even the Swift

A strong diesel proposition is working

The Chevrolet Beat has seen sales jump significantly in the last two months after the introduction of the Beat diesel, though it lost about 11% in the past month at 4,676 cars. As the cheapest diesel car in its category (Rs 4.29 lakh), it is an attractive option for entry-level car buyers who are worried about enormously higher petrol costs.

In fact, the Beat in its diesel form seems to be emerging as a worthy competitor to the Maruti Ritz (which also has a diesel variant). The Ritz sells has been selling at an average of 6,100 cars in the past six months, and the last two months has in fact seen a slight increase in sales, again possibly due to the diesel variant.

We will have to see sales trends for the next few months to know whether the Beat is indeed a strong competitor to the Ritz and i10 in this segment or not.

Four conclusions from hatchback sales results in August
Photo: Nano sales have plunged 63% in August

Buyers more unwilling for shaky propositions

The Tata Nano sales were down 63% at 1,202 cars, a massive drop and the lowest this year. According to reports, Nano inventory has been rising, leading them to even shutting down production of the car for a few days last month. And then, there was a report of another Nano catching fire a few days back.

A new marketing push including reduced down payments and separately focused and expanded dealer network to sell the Nano has been rolled out by Tata. New variants, including a diesel option, are also expected for the Nano.

But the car seems to be losing ground rapidly now, and the company has to figure out fast how to rebuild the Nano proposition.

While the hatchback segment is by far the biggest segment, it is also the toughest one. In a depressed sales scenario, all car makers will have to continuously come up with new ways to offer a better offering to buyers.

Month-on-month hatchback sales
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(Source: Team-BHP, Industry data)