The rise of compact SUV's has resulted in a mixed bag of sales figures for the Indian automobile industry. The most affected by this new trend were the mid-sized sedans.
Even though the passenger vehicle segment recorded a growth of over 12 percent in the first half of the financial year 2016-17, sedan sales were declining across the segments.
This was the worst sales figures for the sub-four metre sedan market in the last seven years. However, the hatchback segment has seen a strong growth of 14 percent.
Car market experts say that the growth of compact SUV's has resulted in the growth of the UV segment by 40 percent in H1 and has created a new buying trend in the country.
Currently, the customers who are looking to upgrade from hatchback model are opting for either a premium hatchback or a compact SUV. Whereas in the past their only option was the sedan.
The sales figures of the sedans clearly tell the story. The total sedan sales dropped down from 3,20,357 units in the last H1 to 2,77,499 this time around. Out of 33 sedans in this segment, only three models have achieved significant growth, they are - Maruti Ciaz, Ford Aspire and Hyundai Xcent.
The reason for this decline in numbers depends on three important factors - competition from similarly priced SUV's, the shift in fleet demand and lack of exciting new launches. At around 30,000 units in a month, the entry level sedans share a big chunk of the market with premium segment only accounting for less than half of that number.
President, Passenger Vehicle Business Unit, Tata Motors, Mayank Pareek said, "The industry showed 12.2% growth in the first half of this fiscal but segment wise, there are huge variations."
He added, "The sedan segment is down 13.3% and the sub-4 metre sedan is degrowing for the first time in last 7 years. Customers are moving from hatch to premium hatch and compact SUVs."