If you want to understand the difference a single word can make in the interpretation of a legislation, look no further than the sub-four-metre, sub-1200cc petrol and 1500cc diesel law. The law was introduced in 2006 to allow small cars to qualify for a significantly lower excise duty; someone however forgot to include the word hatchback in the definition. And the rest, as they say, is geometry.
Also See | The Four-metre Race (PDF)
Always quick on the draw, Tata Motors was the first to exploit the loophole. The carmaker chopped the boot off the Indigo, dropped its length to 3988mm, and passed on some of the benefit of the lower duty to customers. As a result, the Indigo CS or Compact Sedan became approximately Rs 50,000 cheaper and set the charts afire, becoming one of the the largest selling three-box cars (or cars with clearly demarcated engine room or bonnet, body, and boot) in India. As you can expect, the CS caused quite a stir and sent many carmakers back to the drawing board.
That was in 2008, but it’s only now that other companies have lined up several new compact saloons and even utility vehicles, all under 4m. Blame long lead times, rigid programme schedules and general delays but finally, three years after Tata started the trend, competition is set to increase in the compact saloon and SUV (sports utility vehicle) category. For customers, it means lots of choice, at an affordable price.
Volkswagen and Skoda Up saloon (expected 2013-2014)
Volkswagen’s new car, Up, will be launched in Europe this year. Up is the company’s first serious attempt at making a car cheaper than the Polo for global markets. VW has gone from rear engine, rear-wheel drive to more conventional front engine, front-wheel drive - all in an attempt to reduce costs.
While the Up hatchback (car without a clearly demarcated boot) may be too expensive to sell in large numbers in India, the saloon version would be ideal for this market. “We are looking at a notch(back) based on our A00 platform (or Up),” said Ulrich Hakenberg, one of VW’s top engineers and the board member in charge of product development, in April. According to people familiar with the development, Up will still hang on to the well-built feel of a VW, will boast even more interior space on the inside than the Polo, and feature technology like the integrated display. It is likely to be powered by a new four-cylinder 1.2 litre petrol engine which is being developed for the Indian market (production of that engine could commence here too). A one-litre, three-cylinder version could also be on the cards. As is the three-cylinder 1.2 litre TDi from the Polo, a new reduced version of the 1.5 litre TDi. The company could even launch a super-efficient 800cc turbocharged two-cylinder version that develops approximately 52bhp. VW and Skoda will each have their own version of the Up, with the Skoda being targeted at a more value conscious customer.
VW Bulli (expected 2014)
Built on VW’s all-new MQB platform and measuring exactly 3.99 metres in length, VW’s microvan or Bulli seats six passengers in relative comfort on two rows. The seats are flat to allow for maximum space, the design is very modern, and with local production, this mini-MPV could be in at a really attractive price.
Mechanical bits for this car will come from the next-generation Polo, which will also be built on the same platform. All good, but for India they will have to change the name!
Honda Brio saloon (expected 2013)
Honda’s new car Brio isn’t the only kid in the pram. A booted variant of the Brio is also on the cards for Japan’s iconic carmaker.
The Brio saloon will offer more passenger room on the inside and much more luggage space. A slightly retuned version of the 1.2 litre VTEC engine from the Jazz will power the car and Honda is likely to be doing an all-new interior too. This may well become the most fuel efficient petrol saloon in India.
Later versions of this car will also get Honda’s new 1.4-litre diesel engine. People familiar with the matter say that even though it’s a diesel, the engine will be light, free-revving and very peppy.
New Swift Dzire (expected 2012)
Maruti’s new sub-four-metre compact Dzire is yet another killer product that has the potential to outsell even some of the company’s best selling hatchbacks. Based on the all-new Swift, it is likely to deliver outstanding dynamics, boast plenty of features and offer even more space and comfort, despite the shorter overall length. Power will come via updated K-series and DDiS engines and there could be an automatic version as well. The question is whether this car will enough saloon car appeal, coming as it does, in the wake of the current large- booted Dzire?
Mahindra Verito (expected 2011)
The Verito or Logan already has the perfect ingredients for a great compact saloon. It has a huge cabin, an efficient diesel engine and proven dynamics. Renault refused to give the boot the guillotine but free of Renault now, Mahindra will go ahead with this shorter, and hopefully even more appealing, version. Maybe it can make it look slightly better as well.
Mahindra Mini Xylo (expected 2012)
Mahindra may have trailed Tata in terms of compact saloons, but it will be first to the market with a compact multi purpose vehicle. Sure, the Mini Xylo is unconventional in extreme with its SUV stance, truncated rear section and reduced wheel size but it will offer a lot: the best utilisation of space, an upright seating position, a tough go-anywhere build, even a three-cylinder 1.2 diesel engine. Think of it as Mahindra’s own version of the Wagon R.
Mahindra S101-S102 (expected 2013)
Mahindra’s S101 is yet another compact SUV that is less that four metres in length. M&M has a very ambitious target price of Rs 3 lakh for the S101 and hopes that it will become the Nano of SUVs. The S101 will also have monocoque construction, front-wheel drive, and a spare tyre mounted on the tailgate. The engine options include a newly developed 1.2 litre, three-cylinder engine which should generate around 60-70bhp.
Hindustan Ambassador CS (expected 2012)
Shock, horror and some small amount of mirth accompanied news of the compact Amby. This chopped Amby reminded us of the old Landmaster and proof that the oldest car in the world still refuses to die. Still, a cheaper Amby will be more attractive for sure, and for the extra luggage you can always use a roof rack!
Tata Manza CS (coming 2012)
The company that started it all is likely to reuse its bestselling formula in the future. Unlike the Vista, the Manza CS will have an longer wheelbase but less equipment, so Tata can bung on a more competitive sticker. Potential Vista owners who can stretch their budgets will welcome the extra boot space.
Ford Eco Sport (expected 2012)
Built on the same platform as the new Fiesta, this mildly raised and lightly clad mini- SUV will be Ford’s ticket to your wallet. Delivering some of the go-anywhere practicality and fun of a soft-roader, but at the price of an expensive hatchback, the EcoSport will be powered by more powerful versions of the Fiesta engine. A four-wheel-drive version of this car is unlikely, especially in India, where this will make it both heavy and expensive.
The small car rules
In the 2006 Union Budget the then finance minister P C Chidambaram gave special benefits to small cars to boost local production and to promote India as a global small car manufacturing hub. The budget proposed an eight percentage point excise duty reduction (from 24 to 16 %) for cars below 4000mm and with petrol engines displacing less than 1200cc or diesel engines smaller than than 1500cc.
The small car definition has remained unchanged since but the excise duty has fallen dramatically. Small cars today pay only 10%, saving approximately Rs 40,000 in excise duty in the process (for a Rs 5-6 lakh car) over larger cars which fall in the higher 22% excise duty bracket.