Over the past couple of financial years, the automobile industry in India has been witnessing a sales drop in almost every segment. Especially, the executive sedan segment with five-seater capacity falling in the 4,700 to 5,000 mm length range priced between Rs 11 lakh and Rs 19 lakh is affected the most.
The cars in this segment include Fiat Linea, GM Optra, GM Cruze, Hyundai Elantra, Skoda Laura, Skoda Octavia, Renault Fluence, Volkswagen Jetta and Toyota Corolla. Back in 2010, this segment achieved a peak unit sale of 47,991, but in 2013 it dropped to one third of this figure selling only 17,073 units. Contradictorily, the entire passenger vehicle market witnessed a growth of 7.46 percent in the same time period.
As per the industry experts, there are two primary reasons for the decline in the sales in this segment. One is that the segment holds massive significance for the auto MNCs globally as this is the entry-level segment in developed car markets such as US. The other reason is that the drop in sales shows the sluggish sales in the industry indicating that the consumers’ demands are changing.
Furthermore, they also claim that the low-end C segment sedans such as Nissan Sunny, Honda City, Ford Fiesta and others have been constantly getting upgraded providing 90 percent of what the executive sedans possess at only 70 percent of their price. Consequently, the price conscious buyers have sought after these C segment sedans they are luxurious and premium.
In this time period, the Indian car buyers got to seek for the sports utility vehicles (SUV) and this segment witnessed a rapid growth of 5.25 lakh units in 2013 to 2014 as compared to 3.67 lakh units in the time period between 2011 and 2012.
However, the decline in the sales of the executive sedan segment does not end the future of such vehicles as the experts estimate that this segment will start to gain traction as the passenger car market matures in the country. Also, they expect to witness more launches in this segment to lure the consumers.
