A,B,C,D... There's a car for each one of you  ( March '19,2003, ET)

Segmentation seems to have finally arrived in the Indian auto industry. With a flurry of new vehicle launches in the country, ranging from basic transportation models on four wheels to highly stylish, contemporary and expensive sedans, further sub-segments are emerging in the car market.

And with people increasingly classifying cars as ‘B+’, ‘C+’ and ‘imported’, the auto industry expects these to become recognised classifications soon.

“Segmentation of the auto industry is primarily customer driven. It evolves as manufacturers model their products and brand positions according to customer profiles. In the last few years, segmentation based on platforms, features and styling have emerged in India as customer preferences and vehicle applications keep pace with the rest of the world,” said Mr Vinay Piparsania, vice-president, external affairs and director, sales operations, Ford India.

The D segment is a very niche one, with different characteristics of appeal, as would be expected in a luxury range. “We will see further sub-segmentation, between those preferring the latest imported car and those looking for the best price,” he added.

Last year, the Society of India Auto Manufacturers (SIAM) did a reclassification of the D segment when Skoda was launched. It was followed by Octavia, Merc C class and Corolla in the D segment, while the bigger cars formed a new E segment. According to SIAM, the D segment is called the executive segment and the E segment the premium segment.

Both these segments typically have imported cars brought in as CKDs and assembled here. With aspirations flowing high for imported cars, the segment is emerging as a separate category altogether. The B segment, with models like Santro, Wagon R, Zen, Alto and Indica, accounts for 56% of the passenger car market. People have started classifying Palio and Indica as B+ or upper B segment cars because they are larger cars. Similarly, in the C segment, which comprises Accent, Lancer, Baleno, Indigo, Sienna, Astra, Corsa and Ikon among others, people tend to classify cars like Lancer, City and Astra as upper C segment cars.

But for both B+ and C+, SIAM has no sub classifications yet, pointed out sources in Hyundai. According to Mr Piparsania, the benefit to the customer is quite evident — they are able to choose from a range of models that best fit their price and needs.

A natural progression is being observed from A/B to C/C+ and from there to D-E types. Manufacturers may choose to offer models in different segments, while marketing plans can be appropriately developed to establish an appeal for the brands.

More importantly, auto manufacturers are also able to analyse their respective market shares relative to their specific product offerings. Since last year, SIAM has adopted a segmentation approach for sourcing all statistics, enabling manufactures to report their sales, export and production data segment-wise.