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Old 26th June 2012, 15:37   #31
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

@GTO

Surprised to see that you didn't mentions cars (mainly UV's) in your list. Cars like Scorpio, Safari, Innova, now Ertiga etc are also selling in great numbers. Though they don't directly compete with C2 or D1 segment, i guess they steal many customers from them. I have seen some people buying Innova, Scorpio over C2 cars like City, Verna etc. At the same price you get more powerful engine, much more space, and most importantly you get facility to carry additional 2 people along with you whenever required. Last 2 years numbers show that sales of Innova, Scorpio are increasing only. Safari was also doing good numbers.

Just 2 days back when i went to Maruti showroom, i saw the latest price list. In SX4 Vdi pricing i can buy Ertiga Zdi. So if i want to buy a car of 10 L, my preference will go more towards Ertiga instead of SX4 as i will get much more in same price.

One more reason i have seen to buy such cars is they are rough & tough to use. My friend has 3-4 cars at home like Accord, CRV but he uses his Innova for daily commute as it is more economical, has more space & can be used roughly. Bad roads are not a problem for these cars like sedans. I hope TBHP members will agree to me.
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Old 26th June 2012, 15:48   #32
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Excellent comparo and write-up as usual GTO.

The D1 segment is clearly languishing with a not so much bang for buck pricing as compared to their C2 counterparts. And age is clearly showing.
Altis (Why will someone pay 16 lakhs for 87bhp of diesel is beyond me)

Civic: Launched in 2006, not changed much since. Clearly lost out the battle to its younger sibling the City on terms of features, ground clearance and VFM pricing

Laura: Cosmetic changes, it still resembles the rapid from the rear. My friend who bought the Laura was often mentioning he thought the Rapid is more VFM, i.e for the additional 6 lakhs, Laura is not offering anything revolutionary.

Jetta and Vento look pretty similar same case as Laura and Rapid above.

In my opinion, the Crossover MUV segment is poised to heat up in the next months and will have most of the action. It will further drag away the potential D1 buyers to C2 and C2 buyers to MUV. Im sure a large portion of potential Swift desire and Verna buyers would have moved to Ertiga for the space it offers.

That will spell doom for D1 unless the manufacturers drastically change their strategy to offer more luxury segment features or price it better.
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Old 26th June 2012, 16:44   #33
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

When you think about it, it makes perfect sense. When I was in the market for a sedan about 3 years ago, I had a budget of "around 10 lac" to play with. It came down to the Vento versus Laura (both in AT) and the OTR difference was an astonishing 6 lac!

Generalising this, a buyer who gets virtually all the features/space in the C2 segment that he does in the D1 segment would really hesitate to spend that extra 50-60% of outlay just for a "bigger" car with possibly more brand value.

Look at the Civic: it's iconic, gorgeous and that digital speedometer is to die for...but would you really pay 5 lac more when the City offers you pretty much everything?

The flipside of this argument: the D2 segment is becoming increasingly accessible! Blame the Superb and the Fortuner for this: suddenly people are thinking: hey if I save the 5-6 lac on THIS purchase, maybe I can upgrade to my dream D2 vehicle earlier!

As an example: when I was checking out the Skoda Laura, the salesman proactively pitched me the Superb MT instead. It cost "just a lac" more than the Laura L&K! It was a shock to me that the Superb- undoubtedly a symbol of luxury- was that close to my budget.

Someone in his 30s with a decent disposable income would think: let me hold on to a C-segment car for now..and jump directly to a D2, skipping the D1 segment completely. And that's the beauty of it all.

Let's run a survey on D2 buyers over the next couple of years and see how many of them actually migrate from a C2 vehicle. Heck there are members here who have upgraded from Lauras to S500's
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Old 26th June 2012, 16:51   #34
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

One more reason why the D1 segment cars are suffering is because of the poor FUEL EFFICIENCY! (comparing petrol cars only)

The Honda City can deliver anywhere from 12-18KMPL while the Civic will hardly give 8-13KMPL! In no way Civic can give better mileage than City.

When we bought Honda City, dad also considered Civic but it was removed from the lists as soon as we compared the features/prices of both cars.

I agree that Civic handles better than City but it's not worth spending 5-6 lakhs more for few extra horses, little better handling, features like ACC and looks which are purely subjective.

Last edited by bluevolt : 26th June 2012 at 16:56.
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Old 26th June 2012, 17:48   #35
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

I think that the D1 segment is almost neglected by manufacturers. Honda has not even bothered with the customary facelift. Toyota seems to think that 88 bhp is enough for the Corolla. Skoda has got the 140 Bhp engine under its belt, all it needs to do is to tune it to 140 Bhp for the MT version. Sheer laziness or what I don't know! Chevy has just now plonked a new engine under the hood of the Cruze which did not receive any updates for a long time. VW thinks Jetta is in the D2 segment

Quote:
Originally Posted by noopster View Post
The flipside of this argument: the D2 segment is becoming increasingly accessible! Blame the Superb and the Fortuner for this: suddenly people are thinking: hey if I save the 5-6 lac on THIS purchase, maybe I can upgrade to my dream D2 vehicle earlier!

As an example: when I was checking out the Skoda Laura, the salesman proactively pitched me the Superb MT instead. It cost "just a lac" more than the Laura L&K! It was a shock to me that the Superb- undoubtedly a symbol of luxury- was that close to my budget.

Someone in his 30s with a decent disposable income would think: let me hold on to a C-segment car for now..and jump directly to a D2, skipping the D1 segment completely. And that's the beauty of it all.

Let's run a survey on D2 buyers over the next couple of years and see how many of them actually migrate from a C2 vehicle. Heck there are members here who have upgraded from Lauras to S500's
Being able to afford these D2 luxo barges is one thing and finding parking space for them is another story altogether. In my case we wanted to upgrade from the Corolla to something in a higher segment. But all these D2 segmenters are XXL in size. For the self driven it can be a nightmare in our cities. I had to settle for the Laura. In my case I am sure to give the D2 segment a skip when it comes to upgrade time next time around.
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Old 26th June 2012, 18:29   #36
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Let’s see specific cases now
City VS Civic:
The City offers 118 bhp vs 130 offered by the Civic. 12 more horses do seem puny, but the additional torque from the 1.8 L engine makes piloting the Civic much more fun, but in the 1000-4000 rpm range, which most users are likely to use most of the time, the difference is marginal.The Civic offers more space, but the City has never been criticized for the lack of same.
The Civic's interiors is a world apart from anything even in the D1 segment, forget the C2 then. City's interior quality has been a critic favourite.The City can manage 11 kmpl inside city with AC on pretty easily, the Civic would burn your pockets with 8 kmpl or lesser (when pushed hard).The Civic offers better looks, interiors and quality, but when one is asked 5-6 Lakhs more for that, the mind shouts "CITY" !
Vento VS Jetta:
To a non-petrol head, the decision is simply made this way - "Both cars have a same face, the Jetta's derrière looks more expensive though. The interiors are also too similar, the fuel efficiency is better in the Vento, also the spares cost would be less. Oh God! What if my neighbor thinks I have got a Vento like his friend? He would never know that I had paid 6 -7 Lakhs more than his friend. Now why should I buy this Jetta and waste my cash when people won’t realize how much I paid for it? Let me buy the Vent instead!"
Cruze VS Verna:
Now, both these aren't from the same stable, agreed. But these are the two cars that people are most likely to get confused with, IMHO. The Cruze is a diesel rocket with 150 bhp on tap, the Verna with 128 horses hauling it, is no slouch either! Both look menacing from the front and luxurious from the rear. The equipment is comparable too; in fact the Verna with the reversing camera even pips the Cruze's equipment list. The Hyundai has better appointed interiors with the black and beige that the Indians are so much in love with, also the quality is on par, if not better than the Cruze. Space is also on par with the Chevrolet from D1! So when the Verna allows me to save 2-3 Lakhs over the Cruze for image stakes, why wouldn't one pick it up?
Rapid VS Laura:
The Rapid TDi with 105 horses on tap matches and exceeds the power to weight ratio of the Laura D! The quality and interior colour combination is no match to what the Laura brings to the battle. But the space is more than just a close battle between the two. In terms of equipment, the Laura offers more, but the Rapid has all the consumer essential equipment neatly covered as well. Besides the Rapid is a traditional sedan, though the Laura is accepted to be one, it really isn't one. But that is something nice in terms of practicality and uniqueness as well! But when one realizes that he could almost buy two Rapids for the money of a Laura, mind starts taking control and steers away from the bigger Skoda!

Last edited by aravind.anand : 26th June 2012 at 18:32.
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Old 26th June 2012, 23:39   #37
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Quote:
Originally Posted by vb-san View Post
Thanks for the excellent thread.

I feel this segment can do well, if the cars get closer to the D2 segment, in terms of equipment and power. Now the close proximity is only in pricing.
The D2 segment in itself is under threat from the German duo of Audi and BMW (and is likely to see some pressure from Merc as well)

Probably sales numbers of Accords(+crv) against the X1 could be a good indicator of that. No doubt the Japanese makes lot more car sense.
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Old 27th June 2012, 04:51   #38
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Quote:
Originally Posted by 1100D

The D2 segment in itself is under threat from the German duo of Audi and BMW (and is likely to see some pressure from Merc as well)

Probably sales numbers of Accords(+crv) against the X1 could be a good indicator of that. No doubt the Japanese makes lot more car sense.
Perhaps the Honda is a better bet car for car, but frankly a man who wants to spend 30 lacs on a car would probably prefer a base Beemer for its exclusivity rather than boring old things like Honda and so on, wouldn't you say? In a poseur-ish market which prefers the pomp and show to functionality, it doesn't matter which variant one is driving, the main thing is the badge value!
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Old 27th June 2012, 10:07   #39
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Quote:
Originally Posted by 1100D View Post
The D2 segment in itself is under threat from the German duo of Audi and BMW (and is likely to see some pressure from Merc as well)
Indeed, that’s what I mentioned in the last part of my post as well (see below):
Quote:
That said, the lack of sales in D1 segment is not really helping the big brothers in D2. From what I have noticed, buyers who want to step up, go directly to a 3 / X1 / C / A4, and not to a Passat or Superb.

Quote:
Originally Posted by aravind.anand View Post
Vento VS Jetta:
To a non-petrol head, the decision is simply made this way - "Both cars have a same face, the Jetta's derrière looks more expensive though. The interiors are also too similar, the fuel efficiency is better in the Vento, also the spares cost would be less. Oh God! What if my neighbor thinks I have got a Vento like his friend? He would never know that I had paid 6 -7 Lakhs more than his friend. Now why should I buy this Jetta and waste my cash when people won’t realize how much I paid for it? Let me buy the Vent instead!"
For a non-petrolhead, you are right. But an informed buyer can see the clear advantage of buying a Jetta TDI - powerful engine, option DSG gearbox, huge jump in quality, and extremely loaded on safety. It’s a like whether the glass is half empty of half full. Those who see half empty will compare it with the Vento, whereas the other side will see it as something close the Passat or an A4.

IMHO, a bit of price correction to avoid overlap with D2 segment should help to make it brighter for the D1 cars.

On a side note, I read that globally the sales of luxury sedans are diminishing, and high-end SUVs/Cross-overs are gaining an upper hand. The situation is quite similar for us wherein the midsize sedans are under threat from the likes of XUV, or even the upcoming Duster/Ecosport.
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Old 27th June 2012, 10:20   #40
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Thanks for bringing up this very pertinent discussion . I feel that the D1 segment has lost much of its aspirational value . Just Noops hinted there are lots more guys who are making the jump from C2 to the Beemers/ Superbs/Accords/Audis/Mercs than that was happening previously especially when a fully loaded D1 + a "few" lakhs gets you over the line.
The Merc/BMW/Audi class has been running schemes which make the segment that much more reachable , these creative schemes are not on offer in the D1 segment .
In summary I think the D1 segment's poor showing is a combination of 3 factors :-
1. Change in perception about the segment , at least relatively speaking - most of the cars have been around for a while
2. Diminishing Margin Utility for a jump from C2 to D1 - for first time buyers who are stretching , is it a case of the economic uncertainty holding him and think about the extra lakhs that needs to be coughed up for a few extra inches of leg space ? If I buy a XUV and save a couple of lakhs why should I look at D1 ?
3. More "affordability" of the snob value badges (Merc/BMW/Audi) which are within reach due to schemes resulting in manageable cash flows

Thanks
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Old 27th June 2012, 10:34   #41
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Quote:
Originally Posted by aravind.anand View Post
Let’s see specific cases now
Vento VS Jetta:
To a non-petrol head, the decision is simply made this way - "Both cars have a same face, the Jetta's derrière looks more expensive though. The interiors are also too similar, the fuel efficiency is better in the Vento, also the spares cost would be less. Oh God! What if my neighbor thinks I have got a Vento like his friend? He would never know that I had paid 6 -7 Lakhs more than his friend. Now why should I buy this Jetta and waste my cash when people won’t realize how much I paid for it? Let me buy the Vent instead!"
Even I thought of it the same way, until I had a TD of the Jetta. Its a far better car than the Vento, has better safety features, has more space, better quality, and in the indian sense, is a bigger car. I would like to think of it as a smaller passat than a bigger Vento. Yes, I agree its overpriced by a lakh or 2.
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Old 27th June 2012, 11:42   #42
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

I think d1 sedans have become too expensive these days. Octy l&k was about 14-15L but, laura (new octy) is almost 22L and i dont see any significant changes apart from engine/gearbox tech but it should not cost that much even after considering the inflation. I am a big fan of d1 segment for the reasons said by GTO but, they should cost less to be able to sell. I recently cancelled my purchase of laura l&k for this reason. I would definitely have bought it if it was at 18L.
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Old 27th June 2012, 12:01   #43
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Quote:
Originally Posted by shivasuma View Post
Yes, I agree its overpriced by a lakh or 2.
Quote:
Originally Posted by 46TheDoctor View Post
I think d1 sedans have become too expensive these days.
That is the reason No.1. D1 segment cars have a lot of imported parts while C2 segment is heavily localised. Hence the huge price difference. In the US and UK Jetta starts from 9 lakhs. Civic starts from 8L in US. It's almost double here.
If some manufacturer does an i20 to the D1 segment, i bet the segment will grow more rapidly.
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Old 27th June 2012, 12:10   #44
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

Interesting topic and one that is so evident from the sales chart - the slow demise of the D1 segment. I see the following main reasons for this slide:

1) Rising petrol prices and lower FE of D1 cars.
2) Features overlapping between C2 and D1. The Verna is a classic example of more bang for buck viz. features from a segment or two above and even more.
3) C2 cars in most cases perform at almost 90% of the D1 cars but at around 70% of the price. A classic example is City vs Civic. The additional HP and torque of the Civic do not justify the additional price over the City. The Jetta and Vento share a similar analogy.

Having owned an Altis for 2+ years, if I could go back in time, I would probably reconsider and buy a C2 (diesel) sedan and save the extra buck for a possible upgrade in future. Petrol prices and a higher CC petrol car result in a very high monthly running cost. The snob value and higher perceived brand image be damned; a smaller-fuel efficient-feature packed car makes more sense for the well informed car buyer.
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Old 27th June 2012, 12:10   #45
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Default Re: The Diminishing Value of D1 Segment Sedans (Altis, Cruze, Civic, Laura et al)

I think the D1 segment has only itself to blame for underperforming to its potential. To me, I'd anyday rather have a Laura over a Rapid or a Civic over a City. But the manufacturers are not going that extra mile to make them enticing enough.

D1 offerings are not cheap by any standard, yet, they tend to skimp on a lot of equipment whereas the same manufacturers try and go as all out as possible while packaging their C2 products. Take the Laura - why can't the manual version come with the 140 bhp engine like the Jetta does. Why can't the Jetta offer the automatic in Comfortline trim as well.

Look at the interior feeling and kit levels in the Laura, Civic, Corolla or Jetta. They just don't feel like they're going that extra mile to pull the customer, whether its through the level of equipment, gadgets, feel good factor etc.

Skoda again: for a mfg that can offer incredible value with its Superb as well as Rapid, it feels un-VFM with the Laura. Different commitment to presenting a "value proposition" being adopted by the same company wihtin different segments.

IMO, D1 can be a super straddling point between C2 and the 20 lakh plus cars - big enough to add that extra comfort, power and prestige, yet not too big to be self driven with ease.

The fault lies with manufacturers who are not doing enough focussed investment to play on the strength of the segment and offer a value product to their customers.
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