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Hatchbacks - Why are they so popular in India?

It is a well-known fact that Indian car buyers are price sensitive and seek value for every rupee they spend. Add to this the traffic congestions and parking constraints in most Indian cities. These are some of the reasons why compact model hatchback cars have been a huge hit in India. What is a hatchback? It is a car that is compact, efficient and has a trunk integrated to the passenger cabin and in most product line ups, it is the most affordable model. Carmakers like Maruti realized this in the early 80s and have been making cars keeping the Indian consumer in mind. Remember the iconic Maruti 800? It sold over one lakh units annually in India. Back then, the overall car sales were happening only around 35,000 units every year. Maruti still dominates the hatchback and the small car segment in India. Little wonder then that it is the No.1 carmaker in our country. Following Maruti’s success, Hyundai came to India and launched the Santro and subsequently, homegrown automobile major Tata Motors launched its Indica. All were instant hits! This led to new sub-segments in hatchbacks. We now have entry-level hatchbacks (Alto, Eon, etc...), compact hatchbacks (Wagon R, Grand i10, etc..) and premium hatchbacks (Baleno, i20, etc…). The popularity of  hatchbacks like these continues strong in India. We present the top reasons for this trend:

Price

Entry-level hatchbacks are the most affordable cars. The majority of the car buyers in this segment belong to the middle-class category. For them, the budget is important. Hatchbacks like Maruti Alto start at 2.9 lakhs (ex-showroom). This perfectly fits their needs.   Very often, hatchbacks are the first car purchase for many seeking to upgrade from two-wheelers.

Fuel Efficiency

The next important thing that a car buyer looks after the price is the car’s fuel efficiency. Yes, given the rising fuel prices, every car buyer wants a fuel-efficient car. Entry-level and compact hatchbacks usually weigh lower. This allows the car to deliver more mileage and helps in saving fuel bills.

Size

Hatchbacks are compact in size. They are such a breeze to drive in city traffic. Hatchbacks are ideal for home-work-home commuting, drop/pick-up your kids in school, a quick grocery run, etc… You can zip past through the narrow roads and even park in cramped spaces.

A Learner’s Car

For starters, hatchbacks are the preferred choice to learn driving. They are compact with simpler driving mechanisms, unlike sedans or SUVs that are more sophisticated. This is the reason why you see “L” stickers more on hatchbacks.

Maintenance

Maintenance costs for hatchbacks are the lowest. They are not sophisticated machines that burn a hole in your pocket during repairs or maintenance. Hatchbacks are workhorses that you can depend on day in day out.

Resale Value

If you take a look at the top-selling models, the majority of them would be hatchbacks. They also have good demand in the used-car market. So the resale value is most likely to be high.

Flexibility

In hatchbacks, the trunk is integrated into the cabin. If you have a large cargo, you can fold the rear seats and use it as extra cargo space which is not possible in a sedan.

Insurance Cost

Third-party insurance costs are usually calculated based on the engine capacity of a vehicle. Cars with smaller engines (below 1500cc) are cheaper to insure. Many hatchbacks, especially the entry-level ones fall under this category.

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