[artemis_fowl]

Disclaimer: This thread has been inspired by GTO sir’s wonderful thread “The diminishing value of D1 segment sedans (The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al))” and I have attempted to write in a similar style wherever possible. The thread only represents my thoughts along with some facts too. Please do not see this as an attempt of plagiarism. This thread does not seek to offend anyone in any manner. Nor does it intend to advertise any particular car or car manufacturer. And please do pardon the errors, if any. Thank you.

First, some basic definitions.

Segment definitions

• C1 segment:
  
  Sedans
  +Dzire, Amaze, Xcent, Aspire, Tigor and Ameo (not counting the Zest)
  +Definition: Hatchback with a boot stuck on for these reasons:
  1. To qualify for excise benefits on cars below 4 metres in length
  2. To massage our ego of owning a sedan at the price of a hatch
  2.1 To bring the in-laws home in a sedan
  2.2 To get maximum square feet for the money
  
  
• C2 segment:
  
  Sedans
  +City, Ciaz, Verna, Yaris, Rapid, Vento (not counting the Linea as it is discontinued) and Sunny (this one has a confused positioning for sure IMHO. Etios anyone?)
  +Definition: The badi gaddi of the house (some may agree with me). The extended definition (in India at least)?
  1. Beta Sharmaji ne Honda City khareedi hai! (read=brand value)
  2. Great interior space and large boot
  3. Should be great VFM
  
  SUVs
  +Creta, Terrano, Duster, Captur, Kicks and BR-V at one end (above 4 metres in length). Is S-Cross an SUV?
  +Vitara Brezza, XUV300, EcoSport, Nexon, TUV300 and WR-V at another end (below 4 metres in length)
  +Safari Storme and Scorpio (the Scorpio sells decently, the Safari doesn't. The true large SUVs. However, they are not the main subject of discussion; the cladded hatchbacks are.)
  +Definition: Basically an over-glorified hatchback on stilts, with good ground clearance. Add on roof rails and you are good to go! The current rage for the following reasons:
  1. 'Badi Gaddi' Syndrome
  2. Maximum square feet for the money
  3. High commanding driving position
  4.1 Great looks and road presence (Creta and gang)
  4.2 Great looks and road presence on a smaller budget (Vitara Brezza and gang)

The numbers


(Image source: February 2019 Car Sales)

I don't think I have much to write here!
That about sums up the market trends: The SUVs are outselling the sedans about 2-3 times over!

The big question: How?

The diminishing value of the C2 sedans can be primarily attributed to 2 key factors:

1.The increasing competence of C1 sedans (not so relevant)
2.The ever growing popularity of SUVs (more relevant)

1. C1 sedans vs C2 sedans?

Yes. There’s no doubt that the gap between the two are closing rapidly, as C1 sedans are increasingly becoming more competent.

• Differential value: Power
  +The City and Amaze both share the 100 hp i-DTEC diesel.
  +So do the Vento and Ameo (the 108 hp 1.5 TDi engine).
  +The Dzire and Ciaz shared the same ancient 1.3 DDiS engine (75 hp vs 89 hp)
  The C2 segment is not all about power, or we would not have a 90 hp Verna, 105 hp Ciaz, 100 hp City or a 106 hp Yaris. It is more tuned towards efficiency rather than power.
  The fact is, some C1 sedans are fast for sure (Ameo, Aspire diesel). Of course, they are nothing when compared to the 119 hp i-VTEC or the 1.6 CRDi.
  
  
• Differential value: Equipment
  Yeah right. C1 sedans today offer LED headlamps and tail lamps, 6 airbags, CVT / dual-clutch / 6 speed automatic transmissions, engine start-stop buttons, reversing cameras, automatic climate control with rear AC vents, touchscreens with Android Auto and Apple CarPlay, auto headlamps and wipers, cruise control, auto-dimming IRVMs and more. The 7.5 lakh Aspire has 6 airbags, which the 10 lakh Ciaz does not! Fact is, C1 sedans can seriously give the C2 segment sedans a run for their money, in terms of equipment at least.
  
  
• Differential value: Space and comfort
  The difference is not as much as compared to before. Most of the compact sedans excel in this aspect. The Dzire and Amaze are seriously spacious in the rear and are even better than the 10 lakh Verna and Yaris! The Dzire especially has a very good ride quality. Of course, there’s no comparison with the City and Ciaz. Overall, the C1 segment has definitely evolved in this aspect, no longer the cramped hatch with a boot they used to be.
  
  
• Differential value: Perceived quality
  Quality? The Xcent and Ameo have better interiors than the Ciaz. The City’s quality has taken a nosedive this generation. The standards of C1 sedans have seriously improved over the years and they are no longer the “cheap hatchback with a boot”.
  
  
• More bang for the buck:
  The Dzire gives you so many things that the Ciaz does, at a lower price. The same engine, similar equipment and good space. The Dzire Z+ variants suddenly seem very VFM (yes, the same variants for which people were not ready to plonk down a million bucks). The Amaze offers a segment-first diesel CVT which even the more expensive City does not!
  
  
• Pricing:
  The prices of C2 sedans has just gone up, up, up; freeing a large price band for the C1 sedans.
  When the cat is away, the mice will play! Proof?
  +The City’s base variant is almost 10 lakh! This car is seriously overpriced.
  +The Rapid and Vento are definitely expensive, considering that they are almost 9 year old models. They desperately need a full model change.
  +The Ciaz’s base variant was ₹6,99,000. It is now ₹8,19,000! It is fast losing its VFM tag.
  +The Yaris? I don’t think I can say anything.

Another USP of this segment is the number of diesel automatics available at various price bands (Dzire AMT, Ameo DSG, Amaze CVT). In comparison, only the Verna has a diesel AT (Vento-Rapid are almost never considered due to their brand image and A.S.S fairy tales and are hence almost irrelevant). It is shocking how the City and Ciaz have missed out on this.

What was the point of all this rambling?
That the C1 sedans are increasingly being seen as a more VFM alternative to the C2 sedans. That’s it. They do make more sense for people who want a large boot space and spacious interiors in a compact package, with the prestige associated of owning a sedan.

But do note that the reason of the fall of C2 sedans is more attributable towards the rise of C2 segment SUVs, than to the increasing competence of C1 sedans. (I am sure many BHPians will agree with me.)
Why?

2. Here come the (not-so-VFM) monocoque SUVs!

First, let me clear up a point. Not-so-VFM? Yes. The Creta is horribly overpriced, the Terrano even more so (18 lakh on road for an AMT!) and the Duster cannot command such a hefty premium for an outdated model. The Captur-Kicks combo (rather mediocre products IMO) are trying to attack the Creta head-on, rather than undercut it. The Ford Ecosport has lost its VFM positioning, the XUV300 has been priced above expectations and the WR-V is expensive and misses out on some basic equipment (typical Honda). I cannot digest paying a million bucks for the 1.3 DDiS. The Brezza and Nexon are priced well (the Nexon even more so) but most of the gizmos are only on the top variants.

The key differentiators and reasons for their success(vis-a-vis the sedans) are:

• Increased ground clearance
  Okay, this is a necessity seeing our roads. This is a basic criterion in the manufacture of a hatchback on stilts (read= Creta, Brezza and gang). The more, the better.
  
  
• That feeling of being unconquerable in an SUV (the sentiment in question no doubt has been introduced by the Fortuner, at least in India)
  (Spoiler alert: Thread coming up on this topic!)
  
  
• Brand value
  This sentiment has also been introduced by the Fortuner, trickled down to the Safari and Scorpio, making an SUV at the top of our wish list. Renault had a gala time with the Duster and Ford with the Ecosport. These cars have done wonders for the brand image of their respective companies. On the other hand, the Honda City no longer commands the level of brand value it used to.
  
  
• Showing off a little and status in society
  If in doubt, just look at the variant-wise sales of the Creta. The highest selling variant is the E+ diesel. Why?
  That is the most affordable diesel variant and people just want SUVs today. Even if it means that they are getting a poorly specced model. They just want the increased ground clearance and street presence and they are ready to plonk a million bucks for it.
  (Spoiler alert: Thread coming up on this topic!)
  Who wouldn’t clear way for an SUV on the traffic? And who would clear the way for a sedan? A little massage for the ego for sure.
  
  
• Buying a badi gaddi at the price of a lambi gaddi.
  And as per our mindset, maximum square feet for the money. These bloated hatchbacks are nothing but the embodiments of this holy virtue. As RS Kalsi said during the launch of the Vitara Brezza, “Oonchi is the new lambi”. That about sums the market preferences today.
  
  On a related note, the XUV500 single-handedly demolished the D1 sedan segment. Looks like the XUV300 might do the same. It will not kill the sedans completely but it does make for a well rounded package with many segment firsts. I don’t see the point of buying the Yaris, now that even the XUV300 has 7 airbags and all-wheel disc brakes. So much for Yaris’s USP of segment-first safety features.
  
  
  Conclusion
  
  We can conclude that the C2 SUVs are killing the sedans on almost all bases (looks, interiors, gizmos, practicality, engines and power) and that the C2 sedans are fast losing their mojo. They are undergoing their worst phases currently, unable to withstand the market’s fascination with SUVs. They are also undergoing a certain amount of cannibalization from C1 sedans.
  
  Is all lost for them? Not yet. A USP of the segment is that there are many viable options at a given price band. People who are looking for SUVs and find the Vitara Brezza and gang too small, and the Creta too common (no one really considers the BR-V or the Nissan-Renault twins) have nowhere to go, unless they significantly stretch their budget.
  Another USP is the number of petrols and transmission combos available. The Ecosport, Nexon and XUV300 have 3-cylinder engines (note:they are competent engines), the WR-V has a lame 89 hp engine and the Brezza doesn’t even get a petrol! The Creta has a decent petrol engine, the BR-V has the awesome 119 hp i-VTEC (but it’s a non-seller) and the others (read= Renault-Nissan) are powered by the same lame 108 hp engine. On the other hand, there are all-rounded choices in the sedan space, like the City petrol and Vento 1.2 TSi. A person with this budget looking for a petrol car goes for a sedan 8 times out of 10. Because SUV=Diesel. As simple as that. (I am sure many BHPians will agree with me.)
  
  But there is no doubt that C2 sedans are fighting a losing battle. They are slowly losing their competitive positioning to C1 sedans and (not-so-affordable) monocoque SUVs. They will continue to get slaughtered. No two ways about it.
  

[GTO]

Thread moved from the Assembly Line to the Indian Car Scene. Thanks for sharing!

Would say that C2 segment sedans are still enjoying healthy volumes...they haven't been annihilated like the D1 segment sedans. That said, there is no doubt that their volumes are stagnating because:

- C1 (compact) sedans are getting so good.

- Crossovers & SUVs galore! The market loves them.

[aadya]

IMHO C2 Sedans are the quintessential family vehicles. C1 sedans are for price sensitive family persons. SUVs(Real as well as Pseudo) are inherently unsafe at highway speeds which we do not consider while buying a car. There are only few reasons to consider an SUV body style - 1.Potholes 2.Elderly passengers - Egress is painful in a low slung sedan 3. High bonnet provides protection in case of slide under accident conditions. 4.Waterlogging in rainy season(again 3-4 cms do not make huge difference)

Otherwise most people using SUVs in reasonable driving condition in cities are wasting a lots of money on these vehicles they would do well with sedans.

[Parth46]

Market craze notwithstanding, the overall "feel" of the vehicle cannot be discounted.

Even though C2 sedans offer pretty much almost everything a D1 sedan does, equipment/features wise, but there is something about the overall package that cannot be matched. Comparing a Rapid/Octavia combo, the City/Civic combo, and many others, it's just that the overall feel of a D1 sedan is something else.

Similarly, although C1 sedans offer equipment almost at par with C2 sedans, the overall package of a City is unmatched compared to an Amaze. Similarly for a Ameo/Vento combo from VW.

[arindambasu13]

Originally Posted by artemis_fowl

On the other hand, there are all-rounded choices in the sedan space, like the City petrol and Vento 1.2 TSi. A person with this budget looking for a petrol car goes for a sedan 8 times out of 10. Because SUV=Diesel. As simple as that. (I am sure many BHPians will agree with me.)

Exactly the position that I found myself in not too many days back.

After test driving the Ecosport and XUV300 extensively over the last few months, I happened to casually test drive the Honda City. It took just a couple of drives to make me realise that the refinement, power and drivability of the iVTEC engine was in a different league altogether, compared to the petrol offerings in the C-SUV segment. Given the bleak future of diesel engines, petrol is certainly the way to go today (especially for someone like me whose monthly running does not exceed 1000-1200 kms).

Long story short, I found myself cancelling my Ecosport booking and booking the City petrol manual. Ever since the car got delivered last week, I have been having oodles of fun. The refined and creamy 4 cylinder with fantastic driveability and power just reaffirms my decision to pick the City over the Ecosport. Not to mention the killer March end deal that I managed to eke out of Honda.

While the C2 segment sedan may be seeing relatively stunted growth, as an overall package, it continues and will continue to present a compelling case for itself for people who are not enamoured with compact SUVs.

[CrAzY dRiVeR]

Agreed with the thread. I have totally forgotten about C2 segment sedans and haven't even shortlisted them for any upgrade discussions we had in the recent past.

Reasons -

1. Price! Most sedans still charge highly aspirational prices, way above their worth. 18 lakhs+ onroad for a City diesel, that is nothing much more than an 11 lakh Jazz with a boot? Everyone else seems to have priced themselves around this City benchmark, making them comparatively well priced around the City, but the whole segment is punching above their weight IMHO.

2. Not so sporty anymore! Gone are the days of the Global Fiesta or the Linea TJET. None of the cars in the segment handle well enough to sacrifice practicality for sportiness. City is still average, Verna is no more a boat, Yaris is comfortable - but the most fun to drive pick seems to be the good old Vento 1.2 TSi / Rapid 1.5 TDi, both now well past their prime.

3. Practicality - Low seating position, less visibility, less ground clearance, longer footprint, etc.

4. Diesel option - Huge factor in the downfall of sedans against crossovers - but mentioning it lower down the order, as this is going to become almost irrelevant post BS6.

5. More action and excitement in the crossover space - C2 segment options are likely to remain the same in the near future (With an updated City or Ciaz getting launched post 2020), but a LOT of action is expected in the crossover space around this price tag - Skoda Kamiq, VW TCross, new Hyundai Creta, Kia SP2, TATA Blackbird (codename), new Mahindra XUV 5OO, Hyundai Venue, MG Hector, new Ecosport, Honda's Amaze platform crossover etc.

6. Poor resale value of D sedans - The real world sedans have extremely poor sales figures and this shows in their resale value. A good condition Octavia can be had for less money than a Honda City top end, the less said about Corolla and Elantra the better! And these cars are built to a whole different standard of quality as compared to the C sedans - most of them built not much different than the C1 sedans mentioned above, or not much different from the hatchback platform they are based on.

If a sporty sedan is the need of the hour - pick a used D segment beauty instead!

7. Roads - Are getting better alright, but so are nasty surprises, thanks to poor infrastructure planning. Unplanned speedbreakers, huge potholes out of nowhere on fast flowing roads, rocks left by the roadside by resting truckers, dozens of small cabin shaking rumble strips left everywhere on fast open roads, etc are a menace on good roads more than ever. The more I drive on the highways, the more I'm convinced that I need to pick a crossover / SUV next, rather than a sedan.

8. Floods - Are becoming common during the monsoons in our crowded cities. 2015 in Chennai, 2017 Mumbai, 2017 Bangalore, 2018 Kerala - with a lot of small occurences here and there, every year!

9. Falling public interest - No sedan has won Team-BHP COTY, ever! Says a LOT when it happens in an enthusiast forum itself, doesn't it?

All said and done - We are likely to witness a change in market dynamics posts April 2020 (BS6), and sedans might be able to claw their way back in a little bit - though it could also be the likely end of the segment - as good petrol engines find their way into crossovers, a segment which has been dominated by diesel options only till date.

[aniyo]

I think in petrol terms the C2 segment is still insulated. In diesel terms I feel it's hit badly.

For sub-4M segment we really don't have much petrol options. All 1.2 and barely couple of them turbocharged and none offered on sedan.
This make the Honda City, Hyundai Verna 1.5/1.6 petrol resp. a great buy.

In terms of diesel its the same engine. Be it for the C2 sedan, sub-4M sedan or CSUV all share the same engine.
The benefits of the sedan cannot be exploited these days with horrible traffic in city conditions there is no scope of fun to drive. Out on the highway unpredictable road make case for Cross-overs.

Funny part is I am taking less time to office in Nexon than Brio on the same road because I do not have to slow down in many places where I needed to crawl in Brio.

Also parking has become a pain for longer cars. Having driven the Brio for almost 4 years, I find it difficult to park the Nexon itself. City/Verna will be even more difficult. This is one of the reason we stuck to sub-4M and not the C2 sedan category

The small cars have really improved be it refinement, stability or space management.
For diesel there is no major advantage going for the C2 sedans, for Petrol there is still an incentive.

[KiloAlpha]

I crunched some statistics for the C2 segment, taking factory dispatch numbers from our sales threads.

Overall, the C2 segment sedan has held up in sales fairly steadily, until the second half of 2018. It is from Q2/Q3 of 2018 that the share of C2 segment sedans being sold started falling.

Overall, the C2 segment has seen tremendous growth. This segment's share in the Indian car market has increased from around 12.4% in 2011 to 24% in 2018. Couple this to the overall growth in sales, from around 2.41 million in 2011 to 3.34 million in 2018, it does look like the SUV/Crossovers have diminished the value of the sedan in the C2 segment.

My analysis has not juxtaposed these numbers against C1 segment sales, so this is purely a look into the C2 segment. Also, I have taken MUVs like the Marazzo and Ertiga also into consideration, given that a lot of buyers (especially those with larger families) will seriously consider the 5+2 MUV in place of a sedan, given that these MUVs are now as well equipped as sedans, stylish, and reasonably good to drive.



However, if one were to remove the Innova (from 2010-2013, when it was still priced at par with C2 segment sedans), Aria, Mobilio, BR-V, Xylo, Ertiga, Lodgy, and Marazzo, this is what the numbers look like.


I have also attached an MS-Excel sheet of my analysis, anyone who wants to take that and continue analysis is welcome to do so .

[arindambasu13]

Originally Posted by aniyo

The benefits of the sedan cannot be exploited these days with horrible traffic in city conditions there is no scope of fun to drive. Out on the highway unpredictable road make case for Cross-overs.


Also parking has become a pain for longer cars. Having driven the Brio for almost 4 years, I find it difficult to park the Nexon itself. City/Verna will be even more difficult.

As regards the first point - nope, not true, I leave for office early enough for my drive to be super fun for all the 25 kms of it. Even though my City is in the run- in period, I can feel all that power and torque under my right foot waiting to be unleashed. Completely enjoying the fun to drive aspect of the VTEC engine, even on mundane office runs for the past week - and this is with just about 20% of the rev band utilised . As for the highway, have driven the City and Vento on extended highway runs, and both are a hoot and a half to drive. The City may not have the heavy- weight related stability of an Ecosport, but the performance more than makes up for it.

The immediate response of a good gasoline engine was what made me veer away from the diesel crossover. Try as I might, I was not able to reconcile myself to the relatively slow and ponderous response of the diesel engines which I was considering. Diesels in this price range have come a long way and are good units in their own right, but in my experience, cannot match up to the refinement and power delivery of a well tuned petrol plant.

Second point- yes, parking is a trifle more difficult as compared to a small hatchback, but nothing that a few days of familiarising oneself to the length cannot resolve. But then again, I have the Brio for the grocery runs on crowded roads and for really tight parking spots. If its a sole family car that we are talking about, then I suppose compact SUVs will be a more suitable "all-purpose" vehicle.

Frankly speaking, the only other alternative that I considered seriously, the Ecosport, was also fairly cumbersome to park (during my numerous test drives) when compared to the Swift and Brio that I have had for several years now. More than willing to sacrifice this relatively smaller convenience, without any qualms, for the jewel of an engine called the Honda 1.5 iVTEC.

[rohan_iitr]

Originally Posted by GTO

their volumes are stagnating because:

- C1 (compact) sedans are getting so good.

- Crossovers & SUVs galore! The market loves them.

I would like to add another two major factors:

- Ease of parking and driving (a sub 4m vehicle is easier to park and drive in congested city roads, especially when one needs to take a U-turn on a busy road). The higher seating also helps in the case of compact SUV.

- The taxation norms favour sub 4m vehicles. Hence, the customer feels that he/she is getting more value for his money when buying a sub 4m vehicle (compact sedan or compact SUV).

Rohan

[clevermax]

Originally Posted by arindambasu13

It took just a couple of drives to make me realise that the refinement, power and drivability of the iVTEC engine was in a different league altogether, compared to the petrol offerings in the C-SUV segment.

One more aspect is the dynamics - I prefer a lower ride for the dynamics it can offer. Last week I used my cousin's Duster for 4 days, that was enough to reinforce my conviction and decision to go for a sedan instead of an SUV.

[navin]

Originally Posted by CrAzY dRiVeR

Agreed with the thread. I have totally forgotten about C2 segment sedans and haven't even shortlisted them for any upgrade discussions we had in the recent past.

9. Falling public interest - No sedan has won Team-BHP COTY, ever! Says a LOT when it happens in an enthusiast forum itself, doesn't it?

Originally Posted by KiloAlpha

I crunched some statistics for the C2 segment, taking factory dispatch numbers from our sales threads.

Overall, the C2 segment sedan has held up in sales fairly steadily, until the second half of 2018. It is from Q2/Q3 of 2018 that the share of C2 segment sedans being sold started falling.

Overall, the C2 segment has seen tremendous growth. This segment's share in the Indian car market has increased from around 12.4% in 2011 to 24% in 2018.

I have also attached an MS-Excel sheet of my analysis, anyone who wants to take that and continue analysis is welcome to do so .

Hmm.... our in house statistician (Samurai) would love to read this. I guess it's a case of "Perception" v/s "Numbers".

As far as COTY is concerned, TBHP is largely an enthusiast forum. A Corolla for example will never make COTY although as sedans go it is a boringly reliable machine.

[CrAzY dRiVeR]

Originally Posted by navin

Hmm.... our in house statistician (Samurai) would love to read this. I guess it's a case of "Perception" v/s "Numbers".

Numbers here show that the sales of C2 sedans have been constant, but what they don't show is how much growth has happened recently in and around that price range.

DZire took over from Alto as the best selling car in the market, Brezza and Creta both clock numbers several times more than C2 segment cars etc. Spending power of the market has gone up significantly over the last few years - and C2 cars have not really caught the wave as compared to C1 sedans or crossovers.

C2 segment has been holding on to their numbers, but in a fast paced market - that isn't saying much, is it?

[navin]

Originally Posted by CrAzY dRiVeR

Brezza and Creta both clock numbers several times more than C2 segment cars etc.

C2 segment has been holding on to their numbers, but in a fast paced market - that isn't saying much, is it?

The Creta and Brezza are benefitting from the "SUV" fad. Yes they outsell the City, Ciaz, and Verna 2:1 (if you look at the totals) but the sedans aren't dying out yet.

BTW Team-BHP still considers the Creta and Brezza in the "C2" segment (if I remember the sales charts correctly).

[drmohitg]

I would never pick a compact sedan over and above a regular C2 segment. Regardless of the design language, all compact sedans look weird from one angle or the other, except perhaps the Ford Aspire. Also when you take into consideration the space, comfort, engine refinement and power, handling and overall ownership experience, a compact sedan can never match a C2 segment sedan.

Yes ofcourse all this is valid when you have the money to spend on one.

On the other hand compact SUVs and even mini SUVs like Creta, Duster etc would be my pick over a regular C2 segment car. They are equally well kitted, spacious and offer you sublime ride quality on our broken roads.