Vehicle buyers go small in slowdown

Tough times call for smarter purchase decisions. During the first nine months of this fiscal, when the global economy was still recovering from the slowdown and vehicle production had just started getting back on track, more and more people opted for entry-level bikes and smaller cars, shunning larger, more expensive vehicles.No wonder, global biggies such as Honda, Toyota, Volkswagen, General Motors and Ford are all lining up mega launches in the small-car segment. In bikes, Hero Honda, Bajaj Auto and Honda Motorcycle & Scooter India are tightening their grip in the entry-level segment. Even companies such as India Yamaha Motor are thinking of increasing their presence here.According to data collated by the Society of Indian Automobile Manufacturers (SIAM), small car sales accounted for 78.5% of the domestic passenger car market in April-December 2009 (up from 76.6% in the same period of the previous year) while bikes with engine capacity less than 125 cc accounted for 58.35% (55.34%).In absolute numbers, Indians bought 8,40,625 small cars in the period, against 6,62,572 cars in the previous year. Small cars largely mean hatchbacks and vehicles less than four metres in length. Customers also bought 39,55,227 entry-level bikes (30,83,084).A similar trend was visible in vehicle exports. Exports of mid-sized sedans actually fell between April and December by over 34% to 16,818 units (25,613 units) but exports of small cars rose to 3,10,538 units against just 2,24,852 units in the corresponding nine months of 2008.Similarly, exports of bikes between 75 and 125 cc rose to 5,48,359 units (4,64,873 units) whereas exports of larger bikes (between 125 and 250 cc) fell to 2,72,243 units (2,99,742 units). For motorcycles with engine displacements above 250cc also, exports fell to 1,381 units against 1,418 units. Overall passenger car production registered a significant increase to 13,64,436 units (11,01,519 units) between April and December. The only segment where production dwindled was the top-end luxury cars with only 243 units produced against 404 in the year-ago period.