Compact sedan segment sales might come down in the future

The compact sedan segment is one of the fastest growing segments in the recent years and several auto makers are looking to enter this segment. This segment was started by Tata Motors with the Indigo CS among a decade ago and in the recent few years this segment has picked up.

The liking towards sedan and lesser duty makes compact sedan a great buy as the pricing comes down and it somewhat matches that of a premium hatchbacks. There is a difference of 12% in taxes that increases the cost by Rs 12,000-15,000. After the Tata Indigo CS, there are several new additions in this segment. At the moment there is the Maruti Suzuki Swift DZire, Honda Amaze, Hyundai XCent and the recently entered Tata Zest.

Despite the recent hike in duty, small cars still get the advantage over the larger size sedans. In some cases, the compact sedan has some compromises for instance the boot size of the DZire is smaller than a regular sedan and the design of some looks like an after-thought. But the numbers are still growing strong.
Amaze has been the driving force for our growth ever since its launch in 2013 and there are more than 1.25 lakh happy Indian families who have owned the Amaze so far. The compact sedan segment has been in much action during the last two years with new entrants and Amaze has established itself with strong following and good word of mouth. We are confident that it will continue to perform strongly in the future, stated Mr Jnaneswar Sen, Sr Vice President, Marketing & Sales, Honda Cars India Ltd. in an email conversation with MotorOctane.

SWift-DZire-vs-Zest-27 The reduction in petrol prices has encouraged manufacturers to get in turbocharged petrols, beginning with Tata Motors. Last financial year till December 2013; 142,864 units of the Swift DZire and Honda Amaze were sold, however this year the increase has been by 55.65% as in this fiscal year until last month, this segment clocked 222,375 units.

Mr Girish Wagh, , Senior Vice President, Programme Planning & Project Management PVBU, Tata Motors Ltd mentioned, This segment has grown a lot quicker than the market, however the growth of manufacturers will reduce once more players enter this market and sales growth will come down.

At the moment this segment has a lot of potential and this is one reason why more brands are entering into this segment, beginning with Ford this year and next year it will be Volkswagen also. Volkswagen has shaved off 100cc from its 1.6-litre diesel engine to get the advantage of engine duty cut and Ford was wise enough to get a 1.5-litre diesel derived from its 1.6-litre TDCi engine.
On the other hand, a year and half ago Ford began a new segment with the compact SUVs, where more manufacturers are looking to get into and at the same time even the Datsun might just commence a new segment as a compact MUVs. At the moment, the compact sedan segment will have only one clear winner buyers as the options to choose and pick from are getting better by the day. To read our review of the Tata Zest vs Maruti Suzuki Swift Dzire, check out our in-depth comparison.

Source : MotorOctane