Once a hot favourite, mid-sized sedans grapple with shrinking sales

H1 offtake down 7% to 83,498 vehicles; Honda City and Maruti Suzuki Ciaz see a double-digit decline

The mid-size sedans were once the most sought-after cars in the country. But numbers show otherwise. With multiple options in the compact sport utility vehicle (SUV) and compact sedan space, the mid-size sedan seems to be losing its charm among customers.

The Society of Indian Automobile Manufacturers defines mid-size sedans as cars with a length between 4.25 metres and 4.50 metres, with engines of up to 1.6 litre. This segment, which has prominent models like the Honda City, the Maruti Ciaz, and the Hyundai Verna, is now shrinking.

In the first half (H1) of April-September 2018-19, this segment shrunk 7 per cent to 83,498 vehicles. The decline came despite a new product launch from Toyota, the Yaris. In 2017-18, the mid-size sedan segment had grown over 6 per cent to 172,535 units. The overall domestic car market (excluding SUV and vans) has expanded 7 per cent in H1.

The City, once the top-selling sedan in this segment, has seen a 40 per cent drop in domestic sales during H1, even as the company’s compact sedan Amaze is making new records after a full model change in May. The company sold 19,074 units of the City in H1. The Ciaz has seen a drop of 30 per cent to 24,015 units in the same time period.

The only model in the segment that has managed to grow is the Hyundai Verna, helped by the introduction of a new-generation vehicle last year. Verna, the second-biggest model in the segment after Ciaz, clocked a growth of 70 per cent to 21,992 units. Other products in the segment such as the Škoda Rapid and the Volkswagen Vento also reported a double-digit decline. Toyota’s Yaris has managed to sell only 9,389 units in H1.

The decline in the mid-size sedan space is in contrast to the sharp growth in the compact sedan space. According to an analysis by automobile consultancy firm JATO Dynamics, the domestic compact sedan segment (sub-4 metre sedans) has grown 174 per cent during H1 to 247,024 units, from just 90,121 units last year. This three-digit surge comes on the back of the new Amaze launch and a double-digit growth in Maruti Suzuki Dzire volumes. Honda Cars India did not respond to queries related to the decline in volume of the City.

Ravi Bhatia, president (India) at JATO Dynamics, said the mid-size sedans are caught in an attack from the compact sedans on one side and the compact SUV on the other. “The manufacturers have not made much of an investment in mid-size space in the last couple of years. At the same time, the number of new launches and facelift in compact sedan and SUV space is much higher. Buyers are able to get features like sunroof and cruise control in the latest compact sedans and SUVs at a competitive price,” said Bhatia.  

“The customer today has many choices. The SUV is growing at a faster pace. SUVs may be finding favour with buyers who have already driven a sedan,” said R S Kalsi, senior executive director (marketing and sales) at Maruti Suzuki.  

Bhatia said the onslaught on mid-size sedans is coming more from the compact sedans and less from compact SUVs, where growth is just about 13 per cent. JATO’s analysis shows the compact SUV space has expanded 13 per cent to 154,715 units in H1. “We believe the mid-size segment sales will continue to be challenged by the two hyperactive segments, with higher value proposition and superior features. This segment is becoming a question mark unless a revolutionary product hits the market,” he added.

Sales scenario