[Tushar]

Hatchbacks are the mainstay of the Indian car market. However, many buyers with a budget in the piping hot 4-8 lakh space craved the pride of owning a sedan, without having to deal with the added size or major price difference. The solution came in the form of compact sedans.

The segment was pioneered by Tata with the Indigo CS, but it's Maruti that truly capitalized on its potential with the Dzire. Compact sedans helped bridge the gap between B-segment hatchbacks and C-segment sedans, while maintaining a competitive price....courtesy the government's low excise duties for sub-4 metre cars.

While the segment continues to boom (having defied the recent industry slump as well), many motorists often find themselves wondering if all they're paying for with compact sedans is added boot space. This thread will take a brief look at the variant to variant price gaps between compact sedans and the hatchbacks they're based on. All prices are ex-showroom Delhi.

Maruti

- The variant-to-variant price gap between the Swift and Dzire ranges from Rs 24,000 - Rs 64,000. The small gap between the base diesels in particular (Rs 24,000) is unusual?!

- The Swift and Dzire are the only counterparts that have both - the petrol and diesel engines - in the same state of tune.

- Both cars offer the least amount of utility (lowest boot volume and interior space) in their respective segments, but still outsell every one of their rivals by a large margin and consistently feature among the top 3 selling cars in India.

- What the Dzire can give you over the Swift: Added 112 litres of boot space, more plush (beige-black) interiors and softer seats, along with the option of a 4-speed automatic transmission.

Tata

- The starting prices of the Zest petrol and diesel are the lowest in the segment.

- The Bolt and Zest are the only counterparts that offer safety features such as ABS and airbags before reaching the top end variant.

- The variant-to-variant price gap between the Bolt and Zest ranges from Rs 27,000 - Rs 43,000 i.e. it doesn't even touch half a lakh!

- The price gap between the base (XM) Bolt and Zest petrol = Rs 27,000. For that money, you get 180 litres of added boot space, softer ride quality, dual tone interiors, body coloured ORVMs and door handles, ORVMs with LED indicators, 15" rims (Bolt gets 14'') and LED tail-lamps.

- The price gap between the top-end (XT) Bolt and Zest diesel = Rs 31,000. For that money, you get a grunt increase of 14 BHP, 10 Nm additional torque, 10 mm fatter tyres, parking sensors, LED DRLs and the option of an AMT, along with features like the added boot space, dual tone interiors and softer ride.

- In either case, the difference leaves little reason not to upgrade to the Zest.

Hyundai

- The variant-to-variant price gap between the Grand i10 and Xcent ranges from Rs 33,000 - Rs 1.36 Lakh!!

- The Xcent and Grand i10 diesel share the same engine, but the Xcent is tuned to produce 1 BHP and 20 Nm of added torque.

- What the Xcent can give you over the Grand i10: 151 litres of added boot space, the option of 15" wheels, a rear cabin lamp and an auto-dimming mirror. Central locking comes as standard on the base variant, while airbags are standard on the top end variant.

- The Grand i10 offers an LPG variant.

Honda

- The variant-to-variant price gap between the Brio and Amaze petrol ranges from Rs 98,000 - Rs 1.47 Lakh!

- The Brio and Amaze are the only counterparts with a difference in wheelbase i.e. 60 mm (2,345 mm vs 2,405 mm).

- What the Amaze can give you over the Brio: Option of a diesel engine, 225 litres of added boot space, rear power windows as standard, rear armrest with cup-holders and optional dual tone interiors.

[GTO]

Thread moved from the Assembly Line to the Indian Car Scene. Thanks for sharing!

[narayan]

Actually it will be interesting to see the feature difference between the same variants of the hatch back and the compact sedan. I guess the compact sedan would have more features. From the manufacturer perspective, in a production scenario, the incremental cost for a compact sedan over the hatchback might be marginally more only because till the rear door everything is the same. So I would believe the manufacturer would prefer their target customers going for the compact sedan than the hatchback.

[Poloprasad]

I am surprised to see the price gap between the variants of zest & bolt (on both petrol & diesel). Approximate Rs 30,000 is definitely a eye catcher for the buyer. The benefits in terms of features for that price gap is definitely a VFM. Good marketing.

[kothamasi]

I feel instead of, or in addition to compact sedans, car makers should also include compact estate versions of their popular hatchbacks in the sub-4 meter categories. For instance, an estate version of the dzire would be a Swift with a larger and more practically available boot space. This would in effect be a longer hatchback but would offer more boot space than the current dzire compact sedan.

[Vik0728]

Originally Posted by Poloprasad

Approximate Rs 30,000 is definitely a eye catcher for the buyer. The benefits in terms of features for that price gap is definitely a VFM. Good marketing.

Call me a nit-picker but the way I see it, its a double edged sword for a Tata !!
I mean think of this, why would anybody buy a Bolt when the bigger Zest is only 30k INR away.

Tata may have really priced their new launches quite aggressively but I feel they have kinda totally forgotten about their hatchback here.


P.S - I know Bolt is still quite new in the market, but I always wondered why I saw more Zests on the road than the former. I think this thread from Tushar has just answered my question!!

[Tushar]

Originally Posted by Poloprasad

I am surprised to see the price gap between the variants of zest & bolt (on both petrol & diesel). Approximate Rs 30,000 is definitely a eye catcher for the buyer. The benefits in terms of features for that price gap is definitely a VFM. Good marketing.

Originally Posted by Vik0728

Call me a nit-picker but the way I see it, its a double edged sword for a Tata !!
I mean think of this, why would anybody buy a Bolt when the bigger Zest is only 30k INR away.

Tata may have really priced their new launches quite aggressively but I feel they have kinda totally forgotten about their hatchback here.


P.S - I know Bolt is still quite new in the market, but I always wondered why I saw more Zests on the road than the former. I think this thread from Tushar has just answered my question!!

I may be wrong, but this could be Tata's strategy to ensure the sale stays with their showrooms. Essentially offering customers the opportunity to upgrade and reduce the chance of a prospect going to another brand altogether. It may work in favour of the Zest, but if this is the case - what happens to their investment on the Bolt? Will they increase the Zest's price as/when it gains popularity? Again, this is just one possibility and may not necessarily be the idea behind the close-knit pricing.

[CrAzY dRiVeR]

Originally Posted by Tushar

I may be wrong, but this could be Tata's strategy to ensure the sale stays with their showrooms. Essentially offering customers the opportunity to upgrade and reduce the chance of a prospect going to another brand altogether. It may work in favour of the Zest, but if this is the case - what happens to their investment on the Bolt? Will they increase the Zest's price as/when it gains popularity? Again, this is just one possibility and may not necessarily be the idea behind the close-knit pricing.

I feel TATA priced the Zest too less, to gain an advantage over the competition, leaving little gap for the Bolt. Now even Zest is not selling much, and the Bolt is doomed right from the day the pricing is announced- it's killer being the Zest itself.

But this failed experiment (IMO) also shows the actual manufacturing costs between the hatchback and the equivalent sedan is not too different. Hyundai, Maruti and Honda are gaining a lot of profits selling the compact sedan rather than their hatchback variant.

I see no other reason why the Brio hatchback is a flop at around 1000 units a month while the Amaze is a big hit. And Honda is not very interested in promoting it as well. The game changes to a whole new level when the Mobilio pricing comes into the picture.

Hyundai however missed a trick with the Xcent. And no, it's not the price difference compared to the Grand i10. It is the price difference compared to the blockbuster i20 that's the problem. To add to its woes- the diesel option on the Xcent is no match to the 1.4 diesel of the i20. Interesting times ahead when both the DZire and the Amaze will be threatened by premium hatchbacks from their own stable- the YRA and Jazz respectively. Eagerly waiting to see how their marketing strategies unfold.

Another point to note- DZire, Zest and Xcent offer automatic options while their hatchbacks don't. In the case of the Hyundai- Xcent offers all safety kit with the automatic while the Grand i10 doesn't, forcing many customers to migrate to the sedan.

[SmartCat]

From reviews, it looks like most manufacturers have a comparatively less sporty (read: good low speed ride but relatively poor handling) suspension setup for sedans when compared to its sibling hatchback. This is something that needs to be kept in mind (along with price difference & equipment).

Also, looking at spec sheet in Autocar India, I have noticed that the difference in kerb weight of hatchback/sedan siblings is suspiciously negligible. All that extra metal & equipment (in some cases) don't add to much. This makes me wonder if the sedan is made with steel of slightly slower thickness (low weight = higher fuel efficiency), and hence might be a safety/build quality compromise. And in most of the cases, sedan versions are India specific models while its hatchback sibling is sold globally.

[CrAzY dRiVeR]

Originally Posted by smartcat

From reviews, it looks like most manufacturers have a comparatively less sporty (read: good low speed ride but relatively poor handling) suspension setup for sedans when compared to its sibling hatchback. This is something that needs to be kept in mind (along with price difference & equipment).

True of the Swift and the Bolt, and this reflects in their tag lines as well.

Swift- "You are the fuel".
Bolt- "Get. Set. Bolt".

Brio and Grand i10 tries cheesy tag lines though, may be to reflect their premium compact hatch positioning.

Brio- "It loves you back".
Grand i10- "The grand new lingo".

The sedans on the other hand try to be more aspirational-

DZire- "The heart car".
Zest- "Zest up your life".
Xcent - "The real family sedan".
Amaze - "Badle aapke duniya".

[Chetan_Rao]

Originally Posted by CrAzY dRiVeR

Bolt- "Get. Set. Bolt".......

Sort of ironic, getting the 'lamer' state of tune with that tagline, while the family-oriented elder brother gets the 'sportier' tune for a minimal price bump.

[heydj]

Its a pretty interesting marketing strategy by TATA. Keeping difference between Bolt and Zest at 30k. This has a psychological impact on buyers where they feel for a little extra sedan is coming. In this respect no other brand can do so as per consumers mindset. Of course this might cannibalize Bolt sales, but then how does it matter to TATA.

This strategy though is not unique and is used a lot in other industries and sectors such as FMCG products, electronic products, package deals etc. E.g.XYZ top end holiday package may cost lets say 10k, now consumers may not want to buy this and instead prefer medium deal for 6k. Hence to nudge people to the expensive deal company launches another package costing 8k with features less then 10k deal. By virtue of this customer feels 10k deal is too good to miss, not realizing the original intention was to buy 6k deal.

[GTO]

Originally Posted by narayan

Actually it will be interesting to see the feature difference between the same variants of the hatch back and the compact sedan.

The macro differences have already been listed by Tushar in the opening post.

Originally Posted by kothamasi

For instance, an estate version of the dzire would be a Swift with a larger and more practically available boot space. This would in effect be a longer hatchback but would offer more boot space than the current dzire compact sedan.

Every estate / station-wagon sold in India has been doomed, right from the Indigo Marina to the Octavia Combi vRS. Indians hate station-wagons and they're actually a dying breed internationally too. Look at compact MPVs & SUVs if you want more practicality from a small footprint.

Originally Posted by Tushar

but this could be Tata's strategy to ensure the sale stays with their showrooms. Essentially offering customers the opportunity to upgrade and reduce the chance of a prospect going to another brand altogether.

Tata really doesn't have the sales volume to intentionally cannibalize one new product in favour of another. It simply can't afford to have a strategy where it thinks "lets draw people in on the Bolt, then convert them to the Zest". The company's position is way too weak. In February 2015, the Zest saw its sales slide for the 4th month in a row. Its older competitors - the Dzire & Amaze - enjoyed a sales increase in the same period!!

Originally Posted by smartcat

I have noticed that the difference in kerb weight of hatchback/sedan siblings is suspiciously negligible. All that extra metal & equipment (in some cases) don't add to much.

The rear end of a hatchback has to be tougher to absorb the impact of a collision (no boot to act as a crumple zone or take the crash impact in like a sedan). Honda once said that building the Jazz' rear was a lot more expensive than that of the City.

[S2!!!]

Even though compact sedans offer XX features for YY price, I would choose the hatchback versions of the abovementioned cars each and every time, simply because of the well proportioned looks. The hatchbacks look just so much more appealing and desirable in comparison to the compact sedan siblings with a stubby, after-thought boot. Sure, in concept, compact sedans are brilliant but in reality I think they are plain quirky.

Contrary to the perception, I quite liked the fact that the Bolt and Zest have a consistent price difference across the variants. Unlike the competition, Tata isn't over-charging for 'sedan' bragging rights. Honestly, what extra do the compact sedans offer to justify the exorbitant premiums in comparison to the hatchback? Nothing much. Sure, as a positioning strategy, it has worked for those brands but for a regular buyer, these aren't worth it IMO. Tata has always gone astray with their marketing strategies and fallen flat on its face most of the time. Hope it isn't the same this time.

[sandeepmohan]

Interesting read.

As expected, you get the most value from a TATA. I wonder if the Bolt might take off at all with the current pricing strategy between the hatch and sedan.

I believe ABS is on offer, as an option, on the Swift Vxi onwards.

I thought the Chevrolet sedan would feature here. I suppose it does not fall within the 4m club. I don't like the car but it sure is one of the better looking cars among the compact club.

On a different note, I just can't see myself picking up a compact sedan even though there is more value. Two of my favourites are the Swift and Brio. I am sure the sedan variants of the same cars won't drive, handle anywhere as good as the hatchbacks.