BHPian Join Date: Mar 2019 Location: Bangalore Posts: 110 Thanked: 195 Times | The diminishing value of C2 sedans (City, Ciaz, Verna et al) 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.
Last edited by GTO : 1st April 2019 at 09:36.Reason: Adding link to my D1 thread - thanks for sharing! |