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The loophole in the governmenta��s small carA�definition that has made compact sedansA�and SUVs common today

IN 2006, the Indian governmentA�decided to give a huge boost to theA�small car market by giving itA�excise duty exemptions. The logicA�was simplea��smaller cars haveA�higher fuel efficiency, take up lessA�space on the road and are consideredA�cleaner for the environment.A�The excise duty went down to 12.5A�percent from the 24 percent thatA�regular cars manufactured locallyA�were charged. As long as theA�vehicle fit within a 4,000 mmA�length and was poweredA�either by a petrol engineA�lower than 1,200 cc capacityA�or a diesel engine lowerA�than 1,500 cc capacity, itA�was classified as a smallA�car and could avail the exciseA�duty benefits that manufacturersA�passed on to the customer to makeA�these cars affordable.

Taking a shortcut
Nowhere did the definition of theA�small car mention the wordA�a�?hatchbacka��, so itA�was pretty much open to any kind
of body style that you could fitA�into 4,000 mm. The first companyA�to take advantage of this was TataA�Motors. They simply chopped theA�boot on the Indigo sedan to createA�the Indigo CS (for compact sedan)and the rest is history. Over theA�years, there have been sedans andA�now even SUVs that have continuedA�to exploit this little loopholeA�to their benefit. The size restrictionA�does come with its own engineeringA�challenges, but judgingA�by cars like the VolkswagenA�Ameo, Ford Aspire, EcoSport andA�even the Datsun Go Plus, theA�packaging has been mastered
quite well.

a��Muntaser Mirkar

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