With more new compact SUVs hitting the roads, mid-size sedans like Ciaz, Verna and City are not a popular choice among consumers anymore, a segment which was a hit till 2016. Better off-road presence, multiple options and sporty styling in SUVs have pulled customers away from the mid-size sedan segment, so much so that the yearly volumes of the latter have shrunk from over 1,80,000 units in FY16 to less than 1,00,000 now. On the other hand, the yearly volumes of utility vehicles, the likes of which are Maruti’s Vitara Brezza and Hyundai Creta, have touched around 9.5 lakh units currently as against 5.8 lakh units in FY16, a growth of 64% over the past five years.
Rajesh Goel, senior VP and director, sales and marketing, at Honda Cars India, said earlier SUVs were not similarly priced as sedans. “Today the price at which one buys a sedan is same as that of the SUVs, which drives consumers towards them,” Goel told FE. Harshvardhan Sharma, head, automotive retail practice at Nomura Research Institute Consulting & Solutions India, said increasing affordability of utility vehicles has been well received by the masses. “Customer interest has been met by fervent responses from the manufacturers in terms of the product line-up. Newer models, top-of-the-line features and shorter refresh cycles have prompted greater consumer interest,” Sharma said.
So far this fiscal (April-December 2019), sedan sales declined 43% year-on-year (y-o-y) to 69,500 units, the sharpest fall among other passenger vehicle categories. Maruti Suzuki’s Ciaz sales fell 45% y-o-y, while Honda City volumes tumled 42% y-o-y so far. Sales of Hyundai Verna, too, fell around 40% y-o-y in the same period. Similar was the fate of the executive sedans, which include cars like Toyota Corolla, Honda Civic and Hyundai Elantra, as yearly volumes declined from over 15,000 units five years ago to less than 7,000 units now.
Experts believe SUVs have not only attracted the previous sedan buyers, but many mini car consumers have also moved upwards. As a result, the sales of mini cars like Alto, WagonR and Kwid have shrunk by nearly a half in the past five years. Mini car sales fell from 5.5 lakh units in FY16 to less than 3 lakh per annum currently. Gaurav Vangaal, country lead, production forecasting at IHS Markit, said SUVs have a better road presence and signify social status for youngsters. “Moreover, SUVs are easy and powerful to drive on any terrain,” Vangaal said.
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