Toyota Yaris’s launch with an aggressive pricing will surely disturb the status quo in Mid-size Sedan segment in India.
In this study, we will be analyzing who will be getting impacted most by Toyota’s new arrival. We will be taking top 3 players from mid-size sedan segment as these names occupy close to 85% market share in a relatively less crowded segment. The top 3 models include Honda City, Maruti Suzuki Ciaz, and Hyundai Verna.
Honda City is by far the largest selling model of Honda in India, constituting 31% of company’s total sales (1Q-18). Hyundai Verna, launched in 3Q-17, has been the largest gainer in the segment. Its market share has picked to 29% in 1Q-18 from 6% in 1Q-17. Unlike Honda’s City, Hyundai’s reliance on the model is much less and Verna constituted just 9% of Hyundai’s total sales in India in 1Q-18.
Maruti Suzuki’s Ciaz was launched in 4Q-14. Given MSIL’s diverse small car portfolio, its reliance on Ciaz is minimal. We believe that any disruption by a new arrival will have little impact on it. A Ciaz facelift is also expected in August this year and this should help the model in capturing some lost ground. Ciaz’s market stood at 32% in Mid-size sedan segment in 1Q-18, down 560 bps vs. 1Q-17.
[Compare screen: PV Unit sales for top 3 models]
Given Honda’s reliance on City and time gap from now for its next-generation launch (2020), we suspect City to be the most vulnerable of the lot from Yaris aggressive launch. We understand that City has a loyal customer base. However, recent onslaught of the launches dented its market share.
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