Will premium sedans survive in India: Winners, reasons analysed

The sedan segment has seen a sharp decline over the past decade, largely due to the rising demand for SUVs. This trend hasn’t gone unnoticed by manufacturers, who are increasingly focusing on expanding their lineup of SUVs and crossovers to cater to the shifting consumer preferences. In the early 2000s, hatchbacks used to dominate the Indian passenger vehicle market.Over time, sedans took the spotlight offering more space, comfort and a touch of luxury. However, the winds of change have now brought SUVs to the forefront, appealing to buyers with their commanding road presence and versatile capabilities.
The shift in consumer preference is reflected starkly in market data. In FY22, SUVs held a 40.1 percent share of the total Indian passenger vehicle (PV) market. By FY24, this share had surged to 50.4 percent, with projections suggesting it could reach 54-55 percent by the end of FY25. In contrast, sedans, which once enjoyed a significant market share, have now fallen below 10 percent, a clear indication of the segment’s dwindling appeal.

On the other hand, the overall utility vehicle (UV) segment, which includes both SUVs and MUVs, has expanded dramatically, accounting for nearly 60 percent of the market today, compared to just 20 percent a decade ago.

C-segment sedan sales in India: In numbers

While models like the updated Verna and the Skoda-Volkswagen twins provided a temporary boost to the sedan segment, the ongoing shift towards SUVs has once again slowed down sales. Currently, the segment includes models ranging from the Maruti Suzuki Ciaz, starting at Rs 9.40 lakh, ex-showroom, to the Honda City, starting at Rs 12.08 lakh, ex-showroom. Other models in this category include the Volkswagen Virtus, Skoda Slavia, and Hyundai Verna.
Year-to-date (YTD) data until July 2024 paints a grim picture for the C-segment sedan category. Most models have seen a decline in sales compared to the previous year. The Hyundai Verna, for instance, saw its sales drop from 19,344 units in 2023 to 11,364 units in 2024. Similarly, the Honda City fell from 13,122 units to 7,117 units in the same period. Even the popular Skoda Slavia witnessed a decline, with sales dropping from 10,835 units in 2023 to 8,443 units in 2024. The Maruti Suzuki Ciaz, once a strong contender in the segment, saw its numbers fall from 7,193 units in 2023 to just 4,206 units in 2024.
It is interesting to note that amid this period of de-growth for the segment, the Volkswagen Virtus is an exception, managing to grow its sales from 11,395 units in 2023 to 11,572 units in 2024. This has made it the top-selling model in the C-segment sedan category in the YTD July 2024 sales figures.
While the data proves that there is a market for sedans and that the right products can beat market trends, the fading popularity of sedans cannot be ignored. Once thought to shrink and nearly disappear, the segment was revitalized by the Virtus, Slavia, and Verna, but the craze for ‘faux’ SUVs seems to be overpowering everything else. That said, as car enthusiasts, we’re glad to see sedans still on sale and hope that more new models will come through and lift the sentiment of the segment once again.