The Hindu Business Line : Mid-size sedans in the fast lane

THE mid-size sedan segment, poised to be the biggest volume driver in the domestic market, is set to witness a flurry of activity in the coming months.

Overall, the mid-size segment grew 11 per cent in the first six months of the fiscal to 90,791 units, even as the passenger car segment grew at six per cent in the period.

As consumers upgrade to bigger cars and income levels soar, car manufacturers are now charting out key launches in this segment, especially in the upper-end.

Ford is ready with its latest offering in this segment, Fiesta, which is expected to be launched later this month.

Meanwhile, the next year is expected to see a string of big-ticket launches in the segment, including the Mitsubishi Lancer Cedia from Hindustan Motors, the new Hyundai Accent, and the Aveo from the General Motors stable (which is likely to be available in both saloon and hatchback variants). There is also speculation on Maruti's plans to add a mid-size sedan to its portfolio next year.

Interestingly, though none of the new launches is in the entry-level mid-size segment (sedans priced at less than Rs 5 lakh), as higher end mid-size cars are fuelling growth for this category. In fact, while the Honda City and the Hyundai Accent, both positioned on the higher end of the segment, saw rapid growth in sales in the first six months of the fiscal, entry-level mid-size sedans, such as the Ford Ikon and the Tata Indigo, saw a dip in sales in the period.

"We have been able to hold our market share in the entry mid-size sedan segment, which has been declining," Mr Rajiv Dube, Tata Motors Senior Vice-President, Commercial Passenger Car Division, said.

According to Mr Anang Dev Jena, Head, Synovate Motoresearch, the entry-level mid-size segment is getting hit, with the premium hatchback segment (consisting of the Hyundai Getz and the Maruti Swift) coming to life.

"People who are upgrading from smaller cars increasingly prefer to opt for the more feature loaded premium hatchback than an entry level mid-size car. In addition, the entry level mid-size is priced higher than the premium hatchback," he said.

In fact, with new launches in the premium hatchback segment and the mid-size segment, the entry-level mid-size sedan segment may get squeezed further and players operating in this segment may have to reduce prices to sustain sales.

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