Mohini Bhatnagar 24 June 2003 Mumbai: The launch of the Corsa Sail by General Motors India (GMI) has lent some excitement to premium hatchbacks again. The previous such launch was that of the Palio by Fiat India in 2001.

At the time Fiat India had the Siena and the Uno in the market, both of which were witnessing stagnating sales. When it was launched, the Palio worked wonders for Fiat India, at least in the initial six months.

The car helped Fiat sell 32,111 cars in 2002 as against 13,478 units in 2001 - an increase of 138 per cent. Later, in June 2002, the company crossed the 4,000-mark in car sales, registering a 605-per cent growth against a total of 570 vehicles sold in the corresponding period of 2001.

Of the total 4,020 cars sold in 2002, the Palio accounted for 3,357 units, the Sienna 519 units, while the sales of the Palio Adventure and the Uno were at 64 and 80 units, respectively. No doubt, the Palio - with its engine size, brake horsepower and torque - was a winner at least in the initial six months but at the same time, significantly, the Siena's sales remained the same after the launch and even after Fiat India came out with a 'New Siena.'

Both the Palio and the Siena are identical except that the Palio is a two-box car while the Siena is a three-box sedan. Both are built on Fiat's platform 178; all cars built on this platform share the same spares and chassis. While this minimises the cost of spares it also reduces inventory-carrying costs. Another difference is that the Palio is Rs 1 lakh cheaper than the Siena.

There is little difference between the Opel Corsa and the Corsa Sail. The 1.4-litre Corsa produces 88 bhp with a torque of 110 nm at 3200 rpm and the same goes for the Sail. Similarly, the upper variant of the Sail displaces 1598 CC and develops 91 bhp at 5600 revs and 12.6 kgm at 3200 rpm. The Opel Corsa sedan's respective figures are identical.

GMI has not been able to get into volumes sales with the Opel Corsa mainly because till now it did not have a product in the high-selling B segment with cars like the Santro, the Indica and the Zen. For all the competition that exists in the mid-size or C segment none of the cars clock the kind of numbers that B segment cars do. Thus, it almost seems that, GMI is using the Corsa Sail as a quick low-cost method of entering the B segment without introducing a completely new car.

GMI vice-president P Balendran tells domain-b: "We have pioneered the entry into the premium hatchback segment based on the Indian customer's need for a small car with premium class features." While the Corsa Sail, with its tech specs, is an extremely good purchase, it faces competition from the Palio, which is also positioned as a premium hatchback.

GMI is hoping that with the help of the Corsa Sail, it will be able to double the sales of Corsa. During the launch of the hatchback GMI managing director Aditya Vij said the company intends to double the Corsa's sales to 15,000 units this fiscal, against 7,000 units clocked last fiscal.

While one hopes that GMI is able to realise its targets, the positioning of the Corsa Sail in this segment indicates the company's determination to capture the B segment since, at its price, the Corsa is a good buy.

The hatchback has been priced competitively against the top-end model of the Hyundai Santro at Rs 4.39 lakh for the 1.4-litre petrol version and Rs 4.65 lakh for the 1.6-litre version and marginally lower or on par with comparable models of the Fiat Palio. In terms of brake horsepower, torque and engine size it is comparable to mid-sized cars like the Maruti Esteem, the Honda City or the Hyundai Accent.

The Fiat Palio and the Corsa Sail, positioned as they are in the upper end of the B segment, have actually blurred the lines between the B and C segments - at least in terms of tech specs.

GMI's urgency to position a car in the B segment may have led to the launch of the Sail but the danger of the Sail cannibalising the sales of Corsa sedan cannot be minimised. Says Balendran: "A notchback buyer is different from a hatchback buyer." Which means there is a market out there for both the cars.

While not giving any figures Balendran says the company has received "an extremely enthusiastic and overwhelming response on the Corsa Sail and our customer orders have exceeded our initial targets."

While there will always be comparisons between the Palio and the Sail, as they are both premium hatchbacks, the matter ends there. GMI is the Indian subsidiary of the world's biggest automobile company with deep pockets. The company has made significant investments during the last three years to expanding its market presence.

The company is in the process of increasing its capacity at its Halol plant from the current 25,000 to 50,000 units per annum by 2005. It has already invested Rs 1,200 crore on the expansion project and will invest another Rs 180 crore by the yearend to take the total capacity to 50,000 units.

No doubt, the deep pockets of GMI's parent will help it ride smooth over the bumps and grinds in the Indian market. And the conjecture is that GMI's attempts to make a low-cost entry into the B segment may culminate in the Opel Corsa exiting the C segment and another GM model taking its place.