Luxury cars rev up, overtake premium sedans with lower prices, discounts
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The premium sedan segment, consisting of cars such as the Honda Accord, Toyota Camry and Skoda Superb, is facing some serious competition from new models by luxury carmakers with similar or lower price points.
Sales of premium cars fell sharply by 34% to 2,804 units between April and November of the current fiscal as compared to 4,256 units in the same period in FY12. Segment leader Skoda Superb managed monthly average sales of about 160 units in the eight months, while market leader of yesteryear, Honda Accord, sold only 36 units a month on average.
In comparison, the leader in the entry-level luxury sedan segment, BMW's new 3-Series, saw monthly average volumes over two times the Skoda Superb at around 400 units in the period. Mercedes-Benz' C-Class also sells about 300 units a month.
Jnaneswar Sen, senior vice-president for marketing and sales, Honda Cars India said, "Pricing of luxury cars are now very close to executive sedans and I wonder how they are sustaining it. Accord's sales are mostly affected by smaller sedans by luxury carmakers. To improve our volumes, we are training dealers on pushing the value and lower maintenance costs of the Accord."The main blow has come from new entry price points being offered by luxury carmakers to increase their customer base with more affordable models. The trend was started by BMW when it launched the X1 in late 2010 at R22 lakh – the model gave it a sharp lead in volumes over rivals. Then in June 2012, Audi launched the Q3 compact SUV at R26 lakh.
Rival Mercedes-Benz also jumped into the fray but chose a slightly different path by creating a new sub-segment. It launched the B Class Sports Tourer, the first large hatchback among luxury carmakers, in September priced at R21 lakh. BMW will join Mercedes next year when it launches the 1-Series hatchback in India and brings the entry price point for the whole segment further down to R20 lakh. Mercedes will also launch a smaller hatch, the A Class, next year.
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