The Volkswagen Up! and Skoda Citigo are compact cars with a huge potential for emerging markets like India. As much as Indians love small cars, they are big fans of sedans too. Thus everyone wants to upgrade to a sedan as soon as possible. However, big sedans are priced quite high since they attract additional excise duty. In India, a car which is less than 4-meters in length and has a gasoline engine less than 1.2-litre capacity or diesel engine less than 1.5-litre capacity, is classified as a small car.
A small car attracts only 12% excise duty, as compared to 27% for big cars. No matter what the body type is, as long as the vehicle meets the above criteria, it is a small car. This small car classification has led to manufacturers coming up with compact sedans. The upcoming Ford EcoSport meets the conditions. Maruti Suzuki has developed a sub 4-meter version of the Swift DZire (Swift sedan), while Mahindra is working on a sub 4-meter Verito (Logan).
Volkswagen has also expressed its interest to develop a sub 4-meter compact sedan for the Indian market. This vehicle will use the underpinnings of the Up! and would challenge the Toyota Etios and Ford Classic (last generation Fiesta). Pricing could start at around $9,000 for the gasoline powered version, while the diesel powered model will retail at a $2000 premium. Skoda will follow up with a sedan version of the Citigo as well, which can help them boost volumes significantly in the sedan loving continent.
Does a three-box with limited trunk capacity appeal to you?
Faisal Ali Khan is the owner/operator of MotorBeam.com, a website covering the auto industry of India.