Midsize sedans seem to be making a comeback in a market which in the last few years has been increasingly moving towards sports utility vehicles (SUV). For instance, in early March, Honda will launch the new City sedan, followed by Hyundai launching the next-generation Verna later in the month. Last year, two new midsize sedans entered the car market — Skoda Slavia in February 2022 and Volkswagen Virtus in June 2022.
During April-January FY23, sales of midsize sedans grew a hefty 40%, to about 93,000 units from 66,495 units in the same period a year earlier.
While carmakers say there is a renewed interest in this body shape, automotive analysts are cautiously optimistic of midsize sedans making a solid comeback.
Piyush Arora, MD & CEO of Skoda Auto Volkswagen India (which sells both Slavia and Virtus), told FE that even though customer preferences have moved towards SUV body styling, sedans will retain buyer interest. “A reason for sales of sedans dropping over the last few years was limited choice and lack of availability of interesting models. From that point of view, I think both the Slavia and the Virtus have rejuvenated the segment,” he said.
Both these models together have sold more than 30,000 units. “Sales of the Virtus started only in June, and this absolute number would have been higher had it been launched earlier,” Arora said. “This year there will be full-year availability of both these sedans, and their sales share will further rise.”
According to Kunal Behl, vice-president, marketing & sales, Honda Cars India, another reason for the rising sales share of midsize sedans (`10-20 lakh mostly) is that the number of people who can afford cars above `10 lakh has been increasing, thanks to healthy economic growth.
“More people are entering this price segment, and a section of them is shifting to sedans,” he said.
He said a good sign is that the 39-40% growth recorded by midsize sedans is at par with SUVs, and much higher than the growth of the overall passenger vehicle market (a little over 30%).
“A sedan shape will never go out of style. There weren’t too many all-new sedan launches over the last few years and that’s why customer interest in sedans got reduced. Now, thanks to new entrants, there is a renewed interest in this body shape,” Behl said. “The new City has been designed to attract people to the showrooms, and will be a very high-value offering in terms of technology and design.”
A Hyundai India spokesperson told FE that the all-new Verna will make a significant impact in the sedan segment and attract a new wave of customers. “Thanks to its cutting-edge design and state-of-the-art technology, it will be an aspirational product,” he said.
Saket Mehra, partner & auto sector leader at Grant Thornton Bharat, said that midsize sedans are not only competing against midsize SUVs (such as Hyundai Creta, Kia Seltos, Maruti Suzuki Grand Vitara, Toyota Urban Cruiser Hyryder, Skoda Kushaq and Volkswagen Virtus), but also against smaller and cost-efficient SUVs that provide similar driving comfort, take up less space on the road and have lower cost of ownership as well as maintenance. “While brand loyalty (amongst existing sedan consumers) and new sedan launches like the Slavia and the Virtus may persuade a percentage of buyers to opt for sedans, overall consumer sentiment is more inclined towards feature-rich, high ground clearance SUVs,” Mehra said. “This preferential shift has largely been observed in the last four years and is likely to remain in the near future as well.”
Gaurav Vangaal, associate director, Light Vehicle Forecasting, S&P Global Mobility, said that despite new launches, it is tough for sedans to make a solid comeback. “Sales of midsize sedans are expected to marginally rise with new models, but it will be too much to expect for midsize sedans to get even half as popular as SUVs,” he said.
He, however, added that with the all-new Verna, expect sales jump in the short term. “The kind of design and technology Hyundai is known to offer the Verna with, attracts a large section of buyers, at least in the first few months of the launch,” Vangaal said.
There are five midsize sedans (4,000 mm to 4,500 mm in length) in the market: Honda City, Hyundai Verna, Maruti Suzuki Ciaz, Skoda Slavia and Volkswagen Virtus. Four were recently discontinued: Nissan Sunny, Toyota Yaris, Volkswagen Vento and Skoda Rapid.
