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An avalanche of premium compact cars this year

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launches the on Friday.

As Maruti Suzuki, India’s leading car manufacturer, readies for the launch of its Ritz hatchback, its second launch in less than six months, other companies are also gearing up to challenge the make with their flashy and stylish hatchbacks.

The premium compact car segment, classified as above Rs 4.5 lakh, will be abuzz over the next year with launches expected from almost all other car makers — Hyundai Motors, Honda Siel Cars (HSCI), Toyota Kirloskar, Fiat Auto, Volkswagen India and Ford India — too.

The Ritz, which Maruti will launch on Friday, will have a new K12M, 1.2 litre petrol engine, claimed to be more fuel efficient while being low on emission. It will also be the first car on Indian roads to have an engine that is compliant with the BS-IV emission norms. It will be Maruti’s eighth small car and is expected to be priced at about Rs 4.5-5 lakh, although the company has been secretive on this.

Honda will follow with the launch of the Jazz around June. Because Jazz shares its platform with its stylish but bigger cousin, the City, company officials say it will be priced just a bit below the latter, making it India’s most expensive hatchback.

Jnaneswar Sen, senior V-P (marketing), HSCI, said: “In international markets, the Honda Jazz is priced more than the Honda City. However, due to the benefit of excise duty structure in India, expect the Jazz to be priced slightly lower than the City.” Smaller cars attract less duty in India. The City carries a price tag of Rs 8.25 lakh (ex-showroom, Mumbai).

Italian car maker Fiat will proceed with the introduction of the much-awaited Grande Punto a few weeks later. This car will be Fiat’s second offering in the compact segment, after the Palio, but will be priced higher than it. Rajeev Kapoor, president and CEO, Fiat India Automobiles, said, “The B+ (premium compact) segment is growing at a much faster rate than others. This segment will see the most action and we as a company see great opportunity there. We want to become a volume player with this car.”

This segment will be further explored by Hyundai Motors India (HMIL) when it launches the diesel version of the i20 by the end of the year. The company already has three compact cars — Santro, i10 and the Getz — in the market. HMIL had initially planned to sell about 1,000 units of the i20 in India every month but the demand has surged to almost double that. Hyundai is expecting a further increase in demand with the introduction of a diesel engine.

Market sources say German carmaker Volkswagen is planning to advance the launch of the Polo hatchback to the end of this calendar year from the earlier announced date of early 2010. Though the company’s dealers are not informed about the likely price tag, the car is planned to meet a scheduled launch of December 2009, they say. However, there was no confirmation from the company.

Ford Motor Company of the US will also bring its hatchback to India in early 2010. The vehicle, which is expected to be an upper-B segment car, will be pitted against the models of Maruti, Hyundai and Tata Motors with high localisation content. The compact car will come in both petrol and diesel options.

Such expensive compact cars are continually sold in high numbers in most markets of the west but manufacturers are confident of attracting respectable numbers in India, too, despite the price tag (see table).

Experts say the increased focus by car makers on the premium compact segment was expected as the transition to small but premium cars has already started in most developed auto markets.

“Indian consumers, mostly in metropolitan cities, are shifting to the premium compact segment from the entry mid-sized sedan segment. These cars, which carry a price tag of Rs 4.5-7 lakh, offer better style, power, comfort and drivability than mid-sized cars,” said a city-based analyst.

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