SUV & MPV demand to rise: The SUV segment in India is the only one that is going against the trend and is showing healthy growth. Forecasts for the growth in the SUV segment are as high as 50% for 2013. SUVs grew at the rate of 56% in the first half of 2012, while growth was only 17% in 2011, showing a clear trend of buyers gravitating toward SUVs. Sport utility vehicles are increasingly being sought after by urban and rural buyers for their high ground clearance, better road presence and relatively sense of security compared to a hatchback and a sedan.

Sub-Rs.20 lakh luxury cars: Another interesting trend in 2013 is going to be the easier accessibility to luxury brands such as Mercedes, BMW and Audi. These carmakers are planning to bring in entry-level cars in the sub Rs. 20 lakh segment. Mercedes is considering the A-Class hatchback and sedan which may see a starting price under Rs. 20 lakh. BMW will be bringing in its new 1-Series sedan to slot in just below the BMW 3 Series and BMW X1. Audi is also considering the Audi A3, a luxury hatchback, entry-level luxury car for the Indian market. It will probably firm up its plans after Mercedes foray with the A-Class. Mercedes introduced the B-Class Sports Tourer in India last year at a price point of Rs. 21.5 lakh, making it the cheapest Mercedes available yet.

Small diesel hatchbacks: With the demand for diesel vehicles rising significantly (58% of sales were for diesel cars in 2012, compared to 47% in 2011), most car makers are mulling small diesel engines to squeeze into their entry hatchbacks. The demand for hatchbacks has been slow because of the lack of diesel engines, and carmakers think that adding a diesel in the line-up will fuel growth. Currently the cheapest diesel hatchbacks in the market are the Chevrolet Beat diesel and the Tata Indica diesel.

More CNG variants to fill the gap: Carmakers will introduce more cars with alternative fuel set-ups in metros as petrol and diesel prices continue to rise. Honda added a CNG ready variant in the Honda City last year, and it is likely to offer this across its range in the coming months to cater to buyers who want low running costs. Hyundai offers LPG variants on the i10 and Eon and may soon offer factory-fitted CNG variants of these cars too, keeping up with competition such as Maruti who already offers CNG variants of the Alto and Wagon-R.

More compact cars: Cars below 4-metres in length and with a petrol engine capacity below 1.2 litres or diesel engine capacity below 1.5 litres attract an excise duty component of only 12%, while those over this go into the 24% bracket. One of the most anticipated sub-4 metre cars and which will also be in diesel is the Honda Amaze that was launched this year. Maruti will launch a refreshed Dzire, staying under 4-metres to counter the expected attack from the Honda Amaze, while Tata is mulling a sub-4 metre Tata Manza notchback as well as a stretched Indica hatchback (compact MPV to counter the Maruti Ertiga and Mahindra Quanto).