Sedans expected to steer auto sector to growth boosted by new diesel models

After the sluggish growth in the hatchback segment, automakers are betting high on sedans backed by good demand in both domestic and foreign markets. After the small car segment, which accounts for 60 per cent of the domestic passenger vehicle market, the mid-size section is the second-largest by volume and accounts for almost 15 per cent of the overall passenger vehicle volume.

According to the industry, the availability of strong diesel models has also accounted for growth in this segment with models such as Swift Dzire, Hyundai Verna, Toyota Etios and Nissan Sunny (diesel) being some of the best-selling models.

"The mid-size segment also has one of the widest portfolios of diesel offerings, which significantly supported demand," rating agency ICRA said in its latest auto report.

According to the auto sales figures, the country's largest carmaker Maruti Suzuki India Ltd saw 10.4 per cent decline in sales of its mini segment in June while it witnessed a fourfold growth in demand for entry-level sedan Dzire driven mainly by the diesel models.Even Hyundai Motors has seen a good demand for its new Verna with customers waiting for weeks to get delivery.

"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," the ICRA report further said.

"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 report added.

General Motors (GM) has recently launched its new Chevrolet Cruz with a better-performing engine. Even Volkswagen has launched the petrol version of its sedan Jetta. GM is planning to launch another product in this segment SAIL before Diwali.

Even French automobile major Renault is planning to launch an entry-level sedan before Diwali. According to sources, the car will be on the same platform as Sunny and will be priced in the same bracket. The company already has premium sedan Fluence in the Indian market.

According to the industry, good demand in foreign markets is also encouraging auto companies to line up new models. Car exports reported a strong 14 per cent growth in 2011-12 and the sedan segment remains the second-largest category after passenger vehicles.

For example, between April and May, 4,513 units of madein-India mid-size premium sedans were exported, which included 3,900 units of Sunny. Toyota Kirloskar Motors, the Indian subsidiary of the Japanese carmaker, has already received orders to export 20,000 units of its entry-level sedan Etios to South Africa even when the demand is softening in the domestic market.

Volkswagen has also received orders of similar volumes from the South Africa and Malaysia.

Courtesy: Mail Today