Demand for hatchbacks priced below Rs 3.5 lakh on the decline

In April the A segment cars saw a decline in sales growth during the month. The A segment consists of hatchbacks priced below Rs 3.5 lakh. This once most popular segment has seen posted only a 16.14% growth in sales during the month at 38,206 units in comparison to 32,895 units sold in April last year. This is a small growth for the a once popular car segment.

In fact, in previous months too have seen even lower growth in sales in the segment. Last month the A segment car sales was flat and in February the sales grew by just 4.5%. In January the segment posted a 7.9% growth in sales.

For instance, newly launched Datsun RediGo posted a 33.6% decline in sales as it stood at 1,972 units in April from 2,969 units a month earlier. The car is priced between Rs 2.41 lakh to Rs 3.26 lakh (ex-showroom Delhi).

Hyundai Eon, priced at Rs 3.32 lakh (ex-showroom Delhi), too saw a decline of 6.4% month on month (MoM) and 0.7% year-on-year (YoY). It's sales stood at 5,379 units during April.

Renault Kwid, which is one of the top selling cars in the segment, too posted a decline of 18.8% YoY and 22.7% MoM in April. It's sales stood at 7,956 units during the month which fell from 10,296 units in March. Renault Kwid price starts at Rs 2.56 lakh (ex-showroom Delhi).

Tata Nano declined by a massive 68.2% YoY during the month of April as its sales stood at only 350 units. It is priced at Rs 1.99 lakh (ex-showroom Delhi).

The only car in the A segment which continued to power its growth was Maruti Suzuki Alto which posted a massive 36% growth in April by selling 22,549 units. Over the last 6 months it has managed to sell over 17,000 units during a month.

One of the reasons for this is that there is a higher demand for higher priced hatchbacks. For instance, the B2 hatchback segment which are hatchbacks priced between Rs 6 lakh to Rs 8 lakh have seen a huge growth.

The B2 hatchback segment posted a massive 35.7% growth during the month of April. Sales in this car segment were the highest as it sky rocked to 81,063 units in April 2017 in comparison to 47,187 units in April 2016.

It is not only in the month of April but over the last year the B2 hatchback segment is the top selling car segment in India.

Some of top selling cars in the B2 segment include the Hyundai i10 Grand, Hyundai Elite i20, Honda Jazz, Maruti Suzuki Baleno, Ignis, Swift and Tata Bolt.