“Renew the love of sedans,”exulted Volkswagen board member Klaus Zellmar, as the German giant rolled out its most ambitious launch in India Thursday afternoon. The premium sedan Virtus, which was teased through a spate of road shows across the country for the past few months will now go on sale, at a price ranging from 11.2 lakh rupees to nearly 18 lakh.
Yes, you heard right – sedan. Even as Indian car buyers have switched their allegiance in droves to compact sports utility vehicles (SUV), the German giant seems to be swimming against the tide by holding on to the lure of the sedan. So will 'das' sedan float or sink?
According to a report by Crisil back in spring, utility vehicles, of which SUVs form the chunk, will make up as much as 53 per cent of the total car market in four years time. They are presently tipping 40 per cent as of financial year 2022, growing annually at up to 18 per cent -- compare this with small cars, once the bread-and-butter of India's auto industry and now inching along at just around 6 per cent growth.
This is in tune with what Maruti Suzuki's executive director Shashank Srivastava told this correspondent earlier this year on the general trend in all evolved auto markets. “SUV is a global trend, and in all markets they have peaked to about half of the market size,”he had said.
The number of UV models in the country has grown from 48 in 2013 to 68 two years ago. But Volkswagen, the group retails in India under VW as well as Skoda brands, is pitching its eggs on the sedan basket – the splashy Virtus launch is testament to that.
“Sedans were the embodiment of cars in the 20th century,” said Volkswagen brand manger Ashish Gupta at the launch, “We believe the love of sedans never went away.”
That may fly against the prevailing wisdom that most other car makers have heeded, shifting their focus from small cars and sedans to release SUVs in the Indian market. But Volkswagen's strategy is simple – capitalise on the sedan market using the repute of 'German engineering' (catch any YouTube video of a Volkswagen launch and count the number of times the term is bandied about) and the fact that the focus of the local market giants like Maruti Suzuki and Tata have been deflected, and hope to make hay.
The math does work out. Even as the sedan segment has shrunk to around a bit above 10 per cent, it still constitutes as much as 4 lakh cars a year – especially in a sector that is seeing major revival of demand as well as 'pent-up' buying. Volkswagen India's strategy is simple – focus on this category which is presently not being focused on by the market heavies (Maruti Suzuki, for example, is in for a major revamp of strategies, redirecting its energy from small cars into making its fighting presence felt in the SUV segment) and try to score with the executive and corporate crowd which may still continue to prefer the 'regular' sedan.
Will this strategy work? That's the million-dollar question the sales performance of Virtus will answer in the coming weeks
