Compact sedans (Maruti Dzire, Hyundai Aura, Tata Tigor)' share in the overall sedan category grew from 68% in 2021 to 74.6% in 2024.
Mid-sedans' (Honda City, Maruti Ciaz, Volkswagen Virtus) share declined from 26.2% in 2021 to 20.2%.
Over 40 per cent of sedans sold in India now run on CNG as consumers prefer cleaner fuels, and use cars for business purposes, according to data collated by global data and analytics firm Jato Dynamics.
The data reveals that CNG adoption has gained traction steadily over the last few years, rising from a 10.8 per cent in 2021 to 41.5 per cent in year-to-date (YTD) 2024.
Conversely, petrol has lost consumer preference, and its share fell sharply from 82 per cent in 2021 to 55.5 per cent YTD in 2024.
Diesel too has lost its share from 6.5 per cent in 2021 to 1.1 per cent YTD 2024.
Ravi Bhatia, president and director, Jato Dynamics, said the share of taxis in sedans is quite high.
"Almost 33 per cent of Dzire sales go into the taxi segment. Individuals with dual use (small businesses use CNG) also opt for this fuel type. The taxi use has also rubbed on the image in small ways for these brands," Bhatia explained.
Maruti has now positioned the fourth-generation Dzire into the personal use segment, while it retains the Dzire Tour as a taxi.
The fourth generation Dzire also comes with a CNG powertrain to meet strong consumer preference for this fuel type.
Popular models in the taxi segment such as Hyundai Aura, Tata Tigor, and Maruti Dzire have contributed to the growth of compact sedans.
Compact sedans' share in the overall sedan category grew from 68 per cent in 2021 to 74.6 per cent YTD 2024.
In contrast, mid-sedans' (primarily used as personal cars like Honda City, Maruti Ciaz, and Volkswagen Virtus) share declined from 26.2 per cent in 2021 to 20.2 per cent now, the data showed.
Overall, sedans as a category has lost market share in India's passenger vehicle market as consumers increasingly opt for sports utility vehicles (SUVs).
Jato Dynamics data shows the sedan segment's share fell from 10.05 per cent in 2021 to 8.3 per cent YTD in 2024.
Bhatia noted this represents a nearly 17 per cent decline in sedan market share over three years against SUVs', which grew from 38.17 per cent to 53.56 per cent during the same period.
Sedans are increasingly becoming niche products rather than mainstream choices, with success concentrated in specific sub-segments (compact, CNG-powered).
Price sensitivity is also increasing, with a concentration in the entry-level segment, Bhatia added.
Some original equipment manufacturers (OEMs) are making efforts to revive the sedan category.
Maruti launched the fourth-generation Dzire this month, which Partho Banerjee, senior executive officer marketing and sales, Maruti Suzuki India Limited (MSIL), described as a completely new car.
"The Dzire brand is a strong brand, but this car is as good as a new product with high fuel efficiency, plush interiors, and more space," Banerjee told Business Standard.
Since its debut, the Dzire has sold 2.7 million units and consistently ranked among the top 10 highest-selling vehicles in India.
Maruti aims to capitalise on this brand strength. Maruti's Japanese peer Honda is set to revamp its Amaze sedan in the coming months.
Tarun Garg, chief operating officer, Hyundai Motor India, emphasised the company's strategy to refresh its sedan portfolio regularly.
"We refreshed the Verna and Aura sedans in 2023. We follow the typical model cycle and keep adding features and upgrades like new CNG variants (Aura) and style elements (Verna)," said Garg.
"We have a double-digit market share in the sedan segment," added Garg.
While some manufacturers aim for a limited revival, analysts suggest that this may be a prelude to a strategic exit from the segment.
"Before they exit the product category, OEMs would normally push up the production and bring sales, also by making the product available at a competitive price," Deven Choksey, Managing Director, DRChoksey FinServ, told Business Standard.
"The new models are launched at competitive prices to cater to pre-owned vehiclebuyers. In a year or two, they would sign off the older facilities but not before recovering residue investment made in it. It is a proper business strategy," Choksey added.
Upgrades in the segment (with more feature-rich variants) may eat away some share from the entry-level SUV segment, said Bhatia.
"For the customer who wants to upgrade from a hatchback," he added, "but is not able to afford an SUV, a feature-rich sedan may be an option to consider."
Feature Presentation: Ashish Narsale/Rediff.com
