When Maruti Suzuki’s Swift Dzire displaced the Alto as the market leader’s top-selling model earlier this year, it foretold a shift in the value segment of passenger cars.
It was only a matter of time before the competition, too, moved on from fighting with small hatchbacks to compact sedans as their volume entries.
The festive season has seen the incumbents put their compact sedan marketing in top gear to take on new challengers.
In the last few weeks, Honda Cars India (Honda) and Hyundai Motor India (Hyundai) unveiled new campaigns comprising TV ads besides promotional offers on their sub-four-metre sedans.
The renewed pitch coincided with the launch of Tata Motors’ (Tata) Zest.
Billed as the biggest bet by the Mumbai-based car manufacturer in six years, the Zest notched up bookings of more than 10,000 units in a little over a fortnight of launch, according to Tata, which also claimed there was a positive effect on other models at its dealers because of increased footfalls.
Even though the market of compact sedans is around 35,000-40,000 units a month, Maruti controls half of the volumes. The segment is growing at high double digits.
Tata said that it has an assured demand for at least three months on the back of the reported bookings that translates to a little over 3,300 units every month, which is far less than rivals.
The Xcent, which was launched exactly five months before the launch of the Zest, clocks around 7,000 units per month. Honda’s first diesel sedan, the Amaze, sells close to 6,000 units a month.
The Zest remains the cheapest in its class (Rs 4.64 lakh), followed by the Xcent (Rs 4.66 lakh), Dzire (Rs 4.85 lakh) and the Amaze (Rs 4.99 lakh).
Maruti’s Dzire maintains its staggering lead at 15,000-18,000 units a month.
After all, it has the widest sales reach, generating a little over 30 per cent in the rural belts.
Beating the Dzire might seem a tall order, but the competition is revving up.
Hyundai, the country’s second-largest car-maker, says it has just kick-started the second phase of campaigning for the Xcent.
Rakesh Srivastava, senior vice-president (sales and marketing), Hyundai Motor India, says, “The product is now in the build-up phase.
"In the second phase, we wanted to bring in a celebrity.
"So, there was none other than Shah Rukh Khan since he has been associated with the i10 (hatchback) since the very beginning.”
Hyundai is stressing on making owners of its popular i10 graduate to a sedan, and the Xcent, according to Srivastava, lives up to the task.
A latest brand endorsement by Khan helps build a bridge between the two car models.
“A lot of i10 owners want to upgrade to a sedan,” says Srivastava.
The Bollywood celebrity has been associated with the brand since Hyundai entered India in 1998.
His 16-year association with the Korean brand, already the longest by a celebrity with an automobile marque, has featured the Santro, i10 and the Xcent, all volume-generating models.
Facing a capacity-constraint at its Chennai plant, Srivastava says, Hyundai is pulling all stops to increase supply of the high-in-demand brands like the Xcent, Grand i10 and the newly-launched i20 Elite.
Honda’s best-selling product till date is not the City, but the Amaze, which has a new campaign to its name as well.
Amaze was the fastest Honda to clock 100,000 unit sales.
Honda has resumed advertising the car which has been selling for nearly 18 months.
A senior Honda official says that the renewed marketing push for the Amaze is to mark the 100,000-units milestone with the campaign called the ‘Longest Drive through Amazing India’ .
Jnaneswar Sen, senior vice-president -- marketing & sales, Honda Cars India, says, “We have a positive word-of-mouth on the Amaze which has helped the model find stability in sales.
"The most surprising aspect of demand is that one-third of Amaze’s sales is from tier 3 towns, while the balance is between tier 1 and 2.
"We have an order book of around three weeks for the Amaze.”
The intensity of competition in compact sedans will only increase. Ford Motor India (Ford), Volkswagen, Renault and Nissan have all declared plans to enter the segment.
German car-maker, Volkswagen, will launch a sub-four-metre sedan next year based on the Polo hatchback, while Ford will launch a similar-sized sedan based on an all-new Figo.