Despite sharp decline in mid-size sedan market, manufacturers say there is still potential

S Ronendra Singh New Delhi | Updated on August 13, 2021

Increasing customer preference for SUVs the reason for fall

With growing customer preference for SUVs, the mid-size sedan market is seeing a decline in the last few years. But new or refreshed launches have helped companies like Honda Cars India (HCIL), Hyundai Motor India and Maruti Suzuki India (MSIL), who sell mid-size sedans, grow their sales.

Rajesh Goel, Director and Senior Vice President - Marketing and Sales, HCIL, told BusinessLine,“During the last 12 months, Honda City sales have more than doubled and were instrumental in growing the mid-size segment by over 40 per cent. This is particularly important when the competition has intensified not just within the segment but also from other body types and price segments.”

Between July 2019 and June 2020, the company had sold 14,203 units of the City, which grew 120 per cent to 31,201 units between July 2020 and June this year, he said. In all, since its first launch in 1998, the City has gained over 8.15 lakh customers till now.

Honda City rules

“The City currently has a segment share of 38 per cent and continues to be the most preferred car among its competitors. In our research, we have found that almost 45 per cent of its intenders only considered Honda City and no other model while considering their car purchase. This speaks volume about the City’s brand status and customer’s aspiration to own it,” Goel said.

However, companies do agree that over the last three years the choice for the sedans has gone down and most of the customers now prefer the SUVs — in big or small — which has brought down the overall sedan market.

In 2015-16, overall sedan sales were at a peak of 6.35 lakh units This come down to 2.97 lakh units last year. For the first time in the last 15 years, sedan sales have sold below three-lakh units in a year, they said.

The mid-size sedan segment market has come down drastically, according to Shashank Srivastava, Senior Executive Director, Marketing and Sales, MSIL,.

“Mid-size sedans for the first time ever have also gone down in sales — from around 97,000 units in 2019-20 to only 72,000 last year. So, if there is a decline in general for total sedan segment, there is a massive decline in mid-size sedan sales,” he said.

He said although MSIL’s market share has increased in the mid-size sedan, the segment itself has declined sharply. Since its launch, MSIL has sold around three-lakh units of the Ciaz till now.

“However, it is not only in India, but across the globe…sales of sedans have declined even in markets like Japan and the US,” Srivastava added.

Good response for Verna

According to Tarun Garg, Director (Sales, Marketing and Service), HMIL, the company is receiving good responses for the new Verna as there are still sedan lovers in the market. Launched in 2006 with the first generation, the company has sold over 4.39 lakh Verna till July 31.

“Over the years our market share has also grown to 29.8 per cent in 2021 (till July 31) from 10.3 per cent in 2016, which is very significant and showcases a strong acceptance for Verna amongst our customers. Despite of disruptions caused due to the pandemic that erupted globally last year, we have seen a sustained demand from customers,” Garg said.

According to the latest data from Society of Indian Automobile Manufacturers, the mid-size sedan wholesales have grown to 25,879 units in the domestic market between April and July, a jump of 143 per cent as against 10,653 units in same period last year, while sales of the SUVs (compact + mid-size) have recorded domestic wholesales of more than 3.20 lakh units in the same period.

Published on August 13, 2021

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