2014 has started on a slightly bright note for the Indian car market as the next generation Honda City was launched amidst incredible hype and excitement. A lot of expectations are attached to this car and trade analysts are betting on it to be a huge success. However, Honda City is an exceptional model and the buzz created around it is unlikely to be matched. The truth, in a lot of ways, is that companies are battling slow demand, profitability and sustainability issues. Thereby, quite intelligently, firms are targeting particular segments, wherein the scope is high, in order to generate maximum revenue. The compact sedan segment has been growing steadily and was one of the few vertices to return with good sales figures in 2013. Maruti Suzuki Swift DZire and Honda Amaze are the dominating models in the market. Now, according to a report by Economic Times, other big companies like Hyundai, Tata Motors and Ford are planning to launch their own sub-4 metre sedans in the market.
Many experts feel that the success of Honda Amaze has propelled other car makers to explore possible options of recording high sales and sustaining profit levels. Before Amaze was launched, the compact sedan segment was dominated by Maruti Suzuki Swift DZire. However, the Japanese car maker, made significant inroads by launching its first ever diesel model in the market. Needless to say, Amaze compact sedan caused a stir and was somewhat able to knock Swift DZire off its perch. This has certainly given confidence to other car makers and made them aware of the scope that exists.
Hyundai, India's second largest passenger car manufacturer, is going to be among the first to launch a compact sedan, sources have claimed. It is being said that the South Korean car maker is going to launch a sedan based on Grand i10, the highly successful hatchback that was introduced in 2013. Trade analysts believe that this model is going to have a big impact on the market and could give competition to Honda Amaze. Rakesh Srivastava, Senior Vice-President for Sales and Marketing at Hyundai, believes that this segment is quite apt for consumers in India. According to him, aggressive pricing and a high number of features are highly attractive, thereby becoming the right choice for customers.
“The segment has current volumes of 31,000 units a month and is growing in strong double digits. Hyundai with its strong performance in bigger sedan segment would like to have a sizeable presence as the new product would be a strong choice for any aspiring customer," Srivastava said.
Tata Motors, the Indian car maker, has been going through a rough patch off-late and needs a new model to revamp sales. December figures for the auto maker were pretty low and the company is planning to maker a comeback by introducing new cars. Tata Motors, as per reports, will be looking to introduce a sedan based on X1 platform and is code-named as Falcon 5. This is not all as in 2015, the Indian firm would be looking to launch another car, which, tentatively, is going to be based on X0 platform. An official from Tata Motors said that there is great potential in this segment that is likely to grow in coming years. IHS Automotive, a well-known consultancy, has compiled data, which depicts the sort of impact compact sedans have made.
Puneet Gupta, Associate Director at IHS Automotive, believes that compact Sports Utility Vehicles (SUVs) are going to give a stiff fight to sub-4 metre sedans. “The growth is expected to continue in 2014 and 2015 due to introduction of new models from Hyundai, Ford and Tata. However the growth rate may slowdown to single digit as on one side there is consumer shift from hatchbacks to sedans but simultaneously many sedan consumers are moving to compact SUV segment," he said.
Maruti Suzuki Swift DZire, despite the introduction of Honda Amaze, has been raking up good numbers. Mayank Pareek, Chief Operating Officer for Marketing and Sales at Maruti Suzuki, believes that purchasing power and income levels of consumers are rising, which has propelled them to graduate from small cars to bigger ones. “Many car buyers at the entry level who were single or had young families have seen their families getting bigger. The sub-4 metre sedan delivers all that a mid-size sedan can at a lower price. We expect the segment to grow by double digits in the coming years," Pareek was quoted as saying.
