The Telegraph
Since 1st March, 1999
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Sedans face a bumpy ride ahead

New Delhi, Sept. 15: There may be a glimmer of hope on the horizon for some auto makers, but the ride is still going to be a bumpy one for mid-size sedans, with sales plummeting by 12.63 per cent in August this year.

Manufacturers have, in fact, resigned themselves to stagnant sales in this segment, with little chances of a revival in the immediate future. While they struggle to absorb increasing costs on one hand, car makers are also compelled by market conditions to introduce freebies such as comprehensive insurance cover, interest-free loans, free upholstery, CD players and even free holidays and gold jewellery!

The strongest player in the segment, Hyundai’s Sonata priced at Rs 11.9 lakh, could just sell 150 units this August, the same as in August last year. “The growth that this niche market saw last year was more a result of pent-up demand. Now that the competition has increased and most of those who wanted these cars have already bought them, this segment is not likely to grow that fast,” Hyundai president B. V. R. Subbu said. “Moreover, as far as the Sonata is concerned, we feel people are waiting for the V6 automatic variant of the car and hence holding back purchases,” he added. The Sonata is available under interest-free schemes to make it easier on the buyers’ pocket.

Sources in Honda, whose Accord registered a 43.13 per cent drop in sales in August this year, selling just 120 cars from 211 cars a year back, said: “The Accord, priced at Rs 15.75 lakh, is at a price disadvantage to the Sonata. We can only hope that this price point will appeal to car-lovers. But we do not feel the situation will change soon. The Indian economy will take some time to come to a point where the market can accommodate more sales at this price.”

Though the segment is not expected to recover immediately, Ford still sells around 50 Mondeos per month. Vice-president Vinay Piparsania said, “As CBU importers for this car, the market does not hurt us that much. But it will be some time before this segment becomes popular.”

“We do not hope for more sales than this in any average month, but hope to attract customers through comprehensive insurance policies and easy financing. We hope to create a better market among fleet operators who need niche cars to take passengers to-and-fro from the international airport or operate as up-market taxis,” he added.

The Mondeo is priced close to the Accord at Rs 15.56 lakh.

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