With improvement in the supply of chips as well as the introduction of some new models, the sale of sedans in the current calendar year is likely to be higher than in the previous two years. However, it will still not be able to regain the market share of 19.6% it had in CY2018.
During the first seven months of CY2022, the sedan volumes are already at 255,169 units, according to data from automotive analytics and consulting firm JATO Dynamics. Volumes in CY2020 and CY2021 stood at 292,088 and 312,156 units respectively.
The segment offers models that are either less than four metres in length like Maruti Suzuki Dzire, Honda Amaze, Hyundai Aura and Tata Tigor, or more than four metres like Honda City, Volkswagen Virtus, Skoda Slavia, Hyundai Verna and Maruti Suzuki Ciaz.
So far this year, Honda Cars has launched the new City hybrid, while Volkswagen and Skoda have introduced Virtus and Slavia, respectively, in India.
Maruti Suzuki currently dominates the segment with a share of almost 50%. The company’s senior executive officer for marketing and sales Shashank Srivastava told FE that there has been a consistent decline in the segment’s share, both in absolute numbers as well as percentage terms.
“The segment has seen some new models coming in, but they have been few and not made too much of a difference. Our projection is that going forward, this segment is unlikely to grow at the pace of the industry. Its share will remain around 10%,” he added.
However, Honda Cars, which is gearing up to introduce its new SUV in India next year, believes that sedans will continue to be strong pillars of its business in coming years. Its marketing and sales vice president Kunal Behl said that despite the SUV boom in the last few years, there is a significant market for sedans in the country.
“Sedans are an important part of Honda’s core business as evident by the continued customer demand for our models City and Amaze. Both the sedans are strong brands with good customer following,” Behl said.
The introduction of Virtus and Slavia has also assisted in augmenting the volumes in the segment. Based on the India-specific MQB-A0-IN platform, the two models are part of Volkswagen Group’s 1 billion euro India 2.0 project. Volkswagen and Skoda are targeting volumes of at least 2,500 units every month for the sedans.
While Slavia has played an important part in Skoda recording its highest volumes in India in a single year in CY2022 (37,568 units from January to August), Volkswagen has delivered more than 5,000 units of Virtus in just over two months.
“With the emergence and then dominance of the SUV segment, sedans remained low down in the priority order of both carmakers and customers. But Volkswagen Group’s strategy to introduce very India-specific mid-size sedans appears to have revived the overall segment,” said Suraj Ghosh, director, mobility, S&P Global.
Ghosh said that with the success of Slavia and Virtus, this segment could see renewed interest from other carmakers. “And as the SUV body style becomes more popular and common, its charm and appeal might taper off at some point helping the sedans get back in favour,” he added.
“After two flat years, sedans have done well this year. The main drivers of change are improvement in the supply chain as well as the higher waiting period for SUVs,” said Ravi Bhatia, president, JATO Dynamics, adding that some customers are unwilling to wait for a long time for SUVs and are shifting to sedans.