Auto industrys pace boosted by sedans, especially diesel variants

Wednesday 11 July 2012, 10:31 AM by

Post witnessing a dwindle in the small car segment of the Indian auto industry; automakers are bullish on the potential of sedans, which are supported by a favourable demand in both domestic as well as overseas markets. The small car segment in the Indian industry accounts for 60 per cent of the total domestic passenger vehicle market, whereas the mid-size segment has close to 15 per cent share in the same. The mid-size section is currently considered as the second largest in the industry, in terms of volumes.

Auto industrys pace boosted by sedans, especially diesel variants  |
Auto industry’s pace boosted by sedans, especially diesel variants

As per industry experts, several highly acclaimed diesel models have accounted for the growth of the segment. Some of the bestsellers in this segment are Maruti Suzuki Swift DZire, Hyundai Verna, Toyota Etios and Nissan Sunny diesel, which have pulled the masses in huge volumes. According to the rating agency ICRA, “The mid-size segment also has one of the widest portfolios of diesel offerings, which significantly supported demand.”

In June 2012, the largest car maker in India, Maruti Suzuki witnessed a fall of 10.4 per cent in its mini segment sales. However, the car maker rejoiced with a fourfold surge in the sales of its entry-level sedan Swift DZire, majority of which was attributed to the diesel models. Following the league, Hyundai Motors also witnessed a decent demand for its Verna, since the car has a waiting period of weeks.

The report of ICRA further stated, “We believe that growth rate in this segment could have been even higher had there been no capacity constraints on some of the models in the segment like Swift Dzire, Volkswagen Vento, Nissan Sunny and Toyota Etios. We believe that this segment is likely to witness volume expansion in the current year driven by scale-up in volumes for some of the recent introductions namely Swift DZire (key model in this segment) and increasing preference for diesel cars.”

The American auto giant, General Motors (GM) of late introduced its new edition of Chevrolet Cruz, equipped with an improved powertrain. Besides, the car maker is planning to launch a new car, SAIL, in the same segment, in the festive season. Volkswagen also introduced a new petrol variant of its well-established sedan Jetta in the Indian auto industry.

Following the bandwagon of launches, the French auto maker Renault is also looking forward to bring in a new entry-level sedan at the Indian shores before Diwali. Reportedly, the yet-to-be launched model will be based on the manufacturing platform of Sunny and will also be around the same price bracket. Fluence, a previous offering from the company in the premium sedan segment is already present in the Indian market.

On the other hand, the encouraging increase in the demand of foreign markets is attracting auto makers to introduce a line-up of new cars. In the fiscal 2012, exports of passenger cars marked a strong growth of 14 per cent, wherein the sedan section stood as the second largest category, post passenger cars. The Indian subsidiary of the Japanese carmaker, Toyota Kirloskar Motors received an order of 20,000 units from South Africa for its entry-level sedan Etios.

With several upcoming models in the Indian market and favourable demand worldwide, along with impressive sales figures, auto makers in India seem to be having a good time at present.

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