AUTO PUNDITZ
  • Team Auto Punditz

Maruti Nexa Baleno v/s Hyundai i20 v/s Tata Altroz. How Baleno & Altroz took over the Premium Hatch.

Premium Hatchback segment Analysis


Hatchbacks make up about 50% of the Automobile Industry, we have the first-time buyers in big numbers here. The hatchback customers usually then upgrade to the Sedans and UVs. Within the hatchback segment, we have the Premium Hatchbacks make up around 35% of the hatchbacks.


The Government rules differentiating between Sedans with length > 4m and those that are <= 4m, has encouraged a lot of OEMs have developed sub 4m Sedans as also upgraded and feature-loaded hatchbacks. These Premium Hatchbacks are loaded with features for greater drivability as also comfort, safety, and infotainment.

The Premium hatchbacks are priced typically from Rs.8L and above and priced just a little below the basic UVs.The Premium Hatchback volumes are around 3.5L.


MODEL WISE VOLUME FOR THE TOP 5 PREMIUM HATCHBACKS

  • The Premium Hatch Backs contribute about 35%: 3.5L of the total hatchbacks: 12.5L sold.

  • In spite of a sharp decline for the Hatchback segment, the Premium hatchback has managed to sustain its volumes, possibly due to the high-income customers they attract.

  • The higher realizations keep the OEMs interested in this segment.

  • The Premium Hatchsegment has also driven interest in the customer upgrading from Hatchbacks to SUVs.

  • The feature-rich premium hatchback segment has helped in maturing the customer expectations beyond price sensitiveness, seen in the low and middle hatchbacks.

  • The i20 and Maruti Suzuki Baleno have been competing for leadership in this segment for the past 5 years.

  • The Baleno was a Sedan, which has been modified to gain entry into the premium hatchback segment. The model has been discontinued now.

  • Hyundai is focussing on the i20 segment and expects 3-5 models: upgrades and those from other markets, to be launched in the second half of FY 2021-22.

  • After promising much the Honda Jazz and the Volkswagen Polo have fallen by the side. Honda Jazz is going to be discontinued in India, it is gathered.

  • The Toyota Glanza is a promising car but it remains to be seen how much attention it gets from Toyota, which is focussing on consolidating in the MPV and SUV segment.

  • The Altroz, from Tata Motors, has been a surprise package and done very well since its launch.

  • With the Jazz and the Baleno making an imminent exit, i20 can expect the most spirited competition to come from the Altroz.

  • Expect the Market share of Jazz and Polo to be gained by the Altroz.

  • Maruti will continue to pressure i20 with the Nexa channel. with the refresh Baleno, as it needs to find a way to increase volume in the overall hatchback segment.

  • Also,i20 could get lesser attention as Hyundai consolidates on its newfound position as the No.1 SUV Manufacturer.


  • We clearly see that the Baleno Volumes continue to grow vis-a-vis i20. The Baleno has taken away the much-dominated segment of i20 from the premium hatchback segment. The volume trend shows that i20 lost a huge portion of the ground to Baleno in the last 5 years.

RATIO ANALYSIS

  • Clearly from the last 5 years trend, we can see that Baleno which was behind i20 in terms of volume has year after year gained numbers in comparison to i20 and up to 2020-21 has doubled the volume against the i20

  • Even the new Altroz which had made small progress in 19-20, stood at the almost equal volume of i20.

Conclusion

Clearly, a segment that was once started by i20 is now no more its strong turf. Baleno had entered the premium segment through the Nexa channel and has made small strides year after year. Hyundai did try to save guard its fort, with limited editions and new refresh models, but did not get the act together. Baleno on the other hand had a single-minded focus through the Nexa channel. The Nexa Channel continued to grow with its extension of the network to the non-metro channel. The premium experience and reach together, attracted a huge chunk of customers who otherwise thought i20 was the only premium hatchback on offer.


Tata Motors, with the Altroz did something many OEMs didn't dare. They insisted on safety as a USP and directly flanked i20 and Baleno during the launch.

Tata Motors, had its social media campaigns and print campaigns directly comparing itself with the i20 and calling for the attention of all customers in the premium segment. This along with a strong product like Altroz and renewed customer confidence in the Tata Motors brand, Altroz turned the tide in its favour and started gaining volume month on month.

Eventually, both Maruti Baleno and Tata Altroz caught up with premium hatchback segment customers and now rule the roost.