D Segment Luxury Sedans See Poor Sales Trend

Premium sedans falling in the 11–20 lakh bracket which were once a rage amongst buyers going for a luxury car belonging to the D segment, has taken a severe hit in the recent years. Cars like Toyota Corolla, Chevrolet Cruze, Renault Fluence, Hyundai Elantra and Volkswagen Jetta which have been a status symbol and a premier choice of people opting for luxury sedans are experiencing a major decline in sales.

According to SIAM (Society of Indian Automotive Manufacturers), annual sales of cars in the 10–20lakh bracket have shrunk by more than half of what it was three years ago. Going by the sales figures, this very segment was languishing around the 35,000 mark which has now dropped down to 15,000 units in the year gone by. The numbers are all the more alarming in the past year with a slide of 33 per cent, dipping down to 14,875 from 22,195 the previous year. What is also interesting to note is the fact that the number of models catering to this segment has come down to 6 from 9 in a span of 3 years from March 2011 to March 2014. To sum it up, this category of vehicles now constitutes a meager 0.89 per cent of the total market share of four-wheelers which was around 1.77 per cent three years ago when this segment was experiencing a splurge in demand.

Taking a closer look at this, one learns of the causes leading to spacing out of the luxury sedan segment. Understanding a customer’s motive behind buying a luxury sedan is imperative to have a clear understanding of this trend which has occurred and the reasons accompanying it. A buyer on the prowl for a luxurious car with all the modern safety, drivability, comfort and infotainment features to go along with ample amount of space preferably in the sedan category will buy a D segment car.

There are three basic rationales which have led to the cropping up of such a slip in demand. Firstly, prospective buyers who look to opt for a luxury car settle down for the high end versions of mid-size segment cars. These cars dating back a few years were in a sorry state when compared to their present situation. Devoid of most of the electrical gadgetry and electronic features, these vehicles have undergone an overhaul in the recent years. Most of the modern day attributes have been adopted in them. Hence if one were to compare the mid-size segment cars with the luxury sedans, the major difference lies in the space constraints of the smaller vehicles. Thus, people for whom space is not much of a consideration have resorted to buying compact sedans which are available at a much lesser price.

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Secondly, those who are particular about buying a luxury class sedan are ready to spend extra bucks and prefer to go ahead with a rather fancy brand name. Audi and BMW have come out with vehicles like A3 and 135i respectively. Their lower end versions are priced in the 20–25lakh range. Add to that, vehicles like Honda Accord, Toyota Camry and Nissan Teana which further constrict avenues for the aforementioned category. With an array of options at the customer’s disposal for a higher price, they choose to go with a slightly esteemed (read expensive) tag that a vehicle brings with it. These two classes of vehicles have been majorly responsible for spacing out the luxury sedan segment.

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A final nail in the coffin has been the SUV’s such as Toyota Fortuner, Mahindra’s game changer XUV 500, Ssang Yong Rexton and Tata Safari Storme. These vehicles do not fall short on the space quotient in any way whatsoever. All the major attributes of a luxury sedan are very much a part of the higher end models of these SUV’s. Plus the fact that these also come equipped with the 4x4 option, which is an experience in itself, seals and steals the show in one big sweep.

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All of these factors have left the luxury sedan market in dire straits, desperately wanting for more room. It seems more like an encroachment by other well placed segments into the confined space of higher priced sedans.

Carmakers need to come up with a strategy or two in quick succession if they are to save this segment from annihilation. At present, this category is more like that huge elephant in the room which no one really wants to deal with and manufacturers have chosen to overlook in order to avoid encountering it. This section of four-wheeler market is already in shambles and if felicitous steps are not taken with immediate effect, it could well lead to its alienation.

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