On June 25, when Syakar Trading Company Chairman Saurabh Jyoti announced an ambitious sales target of 320 units of Honda Amaze car within a year, it set tongues wagging in the industry. The announcement indeed sounded strange as it came at a time when the demand for sedan cars has remained lower side compared to other segments like hatchbacks and SUVs. However, Jyoti had a reason behind announcing the mammoth target. “The way we are pricing it (the Amaze) makes sure we achieve this target easily,” said Jyoti in a candid talk with the Post. He quickly announced the car’s price would start at Rs 2.5 million. A sedan car, that too from a top-notch global brand like Honda , has been priced like a hatchback — it’s a winning mantra, he argued. Like Jyoti, representatives of many automobile dealers believe the sedan market is likely to go up in the near future. The segment has started gaining traction, with entry-level sedan cars grabbing buyers’ attention. And, carmakers have responded well by shifting their focus on the Asian market, offering entry-level sedans that are able to give a stiff competition to hatchbacks in terms of features as well as price. The immensely popular sedan models, which used to rule the city streets until few years back, are struggling to make a respectable presence in the domestic market now. The increasing penetration of entry-level sedan cars can be gauzed by the fact that of the 783 sedan cars sold until April, 2013, more than 75 percent are entry-level variants. The market for premium-luxury sedans stand at around 150 units per each year. Automobile dealers say the sedan segment holds around 10 percent market share in the domestic four-wheelers market and the penetration is increasing significantly. Models like Maruti Suzuki Dzire, Ford Classic, Honda City, Volkswagen Vento and Skoda Rapid are among the most sought-after sedans. According to Shekhar Golchha, chairman of Nepal Automobile Dealers’ Association (NADA), the growth rate of the sedan segment has increased notably compared to other segments, besides hatchbacks. “Some years ago, sedans were considered expensive vehicles to own. With global carmakers manufacturing sedan cars in India, affordability factor has gone up and this has pushed up the demand for sedan cars in Nepal,” he said, adding entry-level sedan cars have emerged as the best option for those planning to upgrade from their hatchbacks. Sarik Bogati, marketing manager at Pooja International, the sole authorised distributor of Volkswagen, says, “The segment is doing well in recent times, and due to multiple players bringing in affordable products, the competition is getting tougher.” According to him, the company, which had introduced VW Vento sedan car in Nada Auto Show September 2011, sold 100 units in FY 2011-12, and has already sold around 140 units so far this fiscal year. The Indian government’s policy to levy lower tax on sub-4 metre cars has also encouraged carmakers to reduce sedan car size to avail the tax facility, thus making sedans perfectly suitable for busy city streets, he said. “Both India and Nepal are cost-sensitive market and people here look for vehicles with premium feel at affordable prices,” he said, adding the similar preference and buying pattern like that of the Indian market is the other reason behind the growth of sedan car sales in Nepal. Another factor traders attribute in the growth of sedan car sales is the availability of vehicles with moderate engine capacity. While sedan cars were meant to be more powerful than hatchbacks until a few years ago, the engine capacity of both sedan and hatchback now seems to be quite identical, which has increased affordability by reducing operation cost. Similarly, more sedan models are being available in petrol variants, which has increased the attention of car buyers having moderate earnings, traders said. “There used to be a price difference of around 50 percent between sedans and hatchbacks as most of the sedan cars entering Nepal were imported from third countries. The situation has changed now,” said Keshab Aryal, marketing manager - Skoda division at MAW Enterprises, authorised distributor of Skoda in Nepal. He said Skoda Rapid, an entry-level sedan, has secured a 12 percent share in the domestic sedan market. GO Automobiles Director Aakash Golchha also agrees that the entry-level sedan market is growing. The company said it sold around 150 units of Fords Classic so far this year. “Entry-level sedans have created a new market segment,” said Golchha. “Sedan cars offer luxurious feel and executive looks, and now have started to come within the budget.”
Posted on: Sun, 14 Jul 2013 07:10:42 +0000
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