The FY23 sales of midsize sedans (those above 4 metres in length) might have grown 27.6% — from 86,001 units in FY22 to 109,754 units in FY23 — but the country’s third-largest carmaker Tata Motors won’t enter this segment, a top company official told FE.
Shailesh Chandra, managing director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, told FE that Tata Motors has one sedan in its portfolio, the sub-4 metre Tigor, and it will focus on that, in addition to SUVs.
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“We are not thinking of getting into the midsize sedan segment. We have seen that new model launches push sales, but only to a point. Overall, the market share of sedans has remained range-bound in the past few years, about 10% of the passenger vehicle industry,” Chandra said, “Of that 10%, about 70% is made up by sub-4 metre sedans, where we are present.”
He added that the global and long-term trend is toward SUVs, which have inherent advantages such as command seating position, high ground clearance, feel of a big car — reasons enough for Tata Motors to focus on them.
“Launching new cars is a capital-intensive process, and we need to play in segments where there is lesser risk and which are growing. We have experimented with the Punch, a micro SUV, and it attracted a lot of customers from both sedans and hatchback cars; similarly, the Nexon SUV has attracted a lot of sales from the sedan segment,” he added.
A source told FE that around 2019-20, Tata Motors was planning to develop a midsize sedan based on the Altroz premium hatchback, but the plan didn’t move beyond the discussion stage. “The sales share of midsize sedans has been falling —from 6.9% in FY17, to 6.4% in FY18, 5.6% (FY19), 3.9% (FY20), 2.8% (FY21) and 2.8% (FY22),” he said.
“Even though new launches pushed midsize sedan sales in FY23, the gain was very small, with their overall share rising to only 2.82%. It doesn’t make sense to invest heavily in a platform where returns may be inadequate.”
In late FY22 and FY23, three new midsize sedan models entered the market (Skoda Slavia, Honda City hybrid and Volkswagen Virtus), one facelift (Honda City) and one new-generation (Hyundai Verna). These did accelerate sales, but only to a point. “What these new launches have done is arrest the decline of the midsize sedan,” an analyst told FE. “The industry grew 26.7% in FY23, and midsize sedans grew 27.6%.”
Midsize sedans saw the biggest jump in April 2023, when their sales increased a whopping 64.3% (to 10,005 units), from 6,091 units in April 2022. But that was due to the sales surge provided by Hyundai for its all-new Verna, which sold 4,001 units.
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India currently has five midsize sedans — Hyundai Verna, Honda City, Skoda Slavia, Volkswagen Virtus and Maruti Suzuki Ciaz.
Tata Motors had launched a midsize sedan called the Indigo Manza in 2009, but it was discontinued in 2015 due to falling sales.
