Short Cars With A Rump, And Why India Is Nuts About Them

Tuesday, April 10, 2012

Short Cars With A Rump, And Why India Is Nuts About Them

According to lore, Americans dig big cars, Europeans love their hatchbacks, Australians love pick-ups. And the Indians? Indians love sedans. The sedan is a status symbol for most in India. It provides a feeling of accomplishment. It also costs more. A sedan does not cost much more to make than its hatchback platform cousin. What makes a sedan more costlier are the taxes we have to pay.

The Indian government wants to promote small cars as they are eco-friendly and consume less fuel. They are easy to park and maneuver. They take less space on the road and help in reducing traffic congestion. If you visit India, you will notice that the infrastructure growth is not keeping pace with the GDP growth. This makes small cars extremely important, and the Government of India is leaving no stone unturned to promote them. But how do they do that?

All cars measuring under 4-meters in length and having an engine capacity of less than 1.5-litres (diesel) / 1.2-liters (gasoline) are classified as a small car and attract only 12% excise duty. All other cars cost you (well, us) 27%. Now what if you want a sedan, but not the tax? This is where the compact sedans come in.

The first company to develop a compact sedan was Tata. The owners of Jaguar Land Rover made the Indigo CS (Compact Sedan), which measured less than 4-meters in length and was powered by a 1.4-litre diesel engine. This helped Tata Motors save 15% excise duty, which they passed on to the buyer, resulting in the Indigo CS becoming the cheapest sedan in the country.

The next company to follow the Compact Sedan craze was Maruti Suzuki (Suzuki's Indian operations), which developed the Swift DZire (a Swift with a 316 liter trunk). In comparison, the Honda Jazz has a trunk space of 399-liters. But still the Swift DZire (gasoline) sells almost twice that of the Jazz (the Jazz is only available in gasoline).

The compact sedan craze is quite high and growing. This is the reason why Mahindra (which now owns the rights to the Renault/Dacia Logan and has renamed it Verito) is planning to cut the bumpers of the Verito to make it a sub 4-meter car. Why did Toyota's made-for-India-car, the 4.26 meter Etios, get a shorter brother, the 3.77 meter Etios Liva? Now you know.