The year was 2000. The first two Completely Built Units (CBU) of Skoda Octavia landed in India and rushed to Aurangabad where the Volkswagen Group company would eventually set up a modern manufacturing facility. A confident Imran Hassan, as the head of the Czech company in India, looked keen to drill the fact that his Octavia was a car with a Czech badge but actually German in its quality – build and almost all of that it had to offer. A precursor of a segment that would pull buyers big time, the Octavia was official launched a year later in 2001. It was the same year that the Honda Accord was launched, albeit at a higher price point. The Hyundai Sonata too hit the market soon. The Honda Civic arrived in 2005, whereas the Toyota Corolla in 2003. The Hyundai Elantra arrived at round the same time. With SUVs yet to be the rage, these aspirational ‘executive’ sedans soon defined a new standard in the Indian auto industry. They came to occupy what would be termed as the C+ or D-segment. Forming an upper crest of sedans that were status and lifestyle-oriented, the two segment cars drew large sales volumes. The Octavia sold an estimated 8,000 units in 2005. A year before, in 2004, Honda Siel Cars sold 2,977 Accords. It cornered an enviable market share of 40 percent in its segment, an increase of 69 percent over 2003.

Between 2001 and 2010, the ‘executive’ sedan segment continued to be the ‘force’ with good sales. The introduction of new models like the Toyota Corolla and Honda Civic helped. The launch of large SUVs like the Hyundai Terracan, Ford Endeavour and Honda CR-V in the same time span did not create much ruffle as these were priced higher and were out of reach of many. It was with the launch of the Toyota Fortuner in 2009 that the SUV segment began gaining some serious muscle. By then, the D-segment had seen a good amount of shake and tumble. New additions included the Volkswagen Jetta and Passat. By 2011, the segment comprised the Toyota Corolla, Skoda Octavia, Honda Civic, Volkswagen Jetta, Hyundai Sonata Embera, Chevrolet Cruze and a few others. Crowded it became, and with an amount of fanfare to boast of. It turned out to be a segment that every manufacturer wanted a pie of. This, despite the SUV rage catching on since 2012 as the Ford EcoSport and Renault Duster arrived on the scene.

Vehicle buyers in India were suddenly exposed to a wider scheme of things; they were in fact torn between choosing an aspirational sedan or an SUV. The D-segment cars soldiered on with fair numbers to talk home about, albeit the likes of Civic and Octavia and not the Accord and the Sonata. On muted sales volumes, Honda discontinued the Accord in 2013. In May 2013, only 24 units of the ‘executive’ sedan were sold as compared to the sale of 68 CR-Vs. The Toyota Corolla sold 368 units in May 2013 as compared to the sale of 353 numbers in the month before. The Volkswagen Jetta sold 266 numbers in May 2013, and the Passat, 141 numbers. The Octavia, renamed as the Laura, sold 305 units in May 2013 as compared to the sale of 126 units in April 2013.

The near six-car D-segment has shrunk to a lone warrior in 2021. With the latest generation Honda Civic launched and quietly discontinued, the only car that seems to make up the segment today is the new Skoda Octavia. In the absence of Toyota Corolla, the only other car in the segment to give company to the Octavia is the Hyundai Elantra. Its numbers are anything to write home about today. The new Octavia has been priced uncomfortably close to the Superb with a starting price of INR 26 lakh. When it was first introduced in 2001, it was priced at no more than INR 10 lakh.

The executive sedan dilemma

If the Renault Duster should be credited to create some serious pull towards SUVs in India starting from 2012, today, it is the segments containing SUVs that are the most crowded. The clues of how the D-segment has shrunk to include just the Elantra or the Octavia (the new Octavia actually looks to have moved up and beyond the reach of this segment ironically) may be found in the proliferation of the SUVs at various levels – right from the Ford EcoSport level to the Toyota Fortuner level (where SUVs assume a serious form and function, complete with a 4WD system). A segment that did an estimated 10,000 units in 2005 has come down to a few hundred units in 2021. In January 2021, 32 units of the Elantra were sold. Eight units of the Octavia were sold. The Superb sold 239 units in the same month! Comprising cars that measure over 4.5m in length and are powered by engines with a displacement capacity of between 1800 cc and 2000 cc, the D-segment contenders have been priced between INR 15 lakh and INR 25 lakh.

Sitting above the C-segment, which consists of cars like the Maruti Ciaz and the Hyundai Verna, the D-segment cars have always been about status, comfort, features and performance. They are therefore about lower sales volumes and high production costs, making them difficult to pursue by many automakers. Proving to be a segment that has been tough to crack for many OEMs, the ones to taste immense success have been Skoda and Toyota with their Octavia and Corolla, respectively. With sales shrinking to become a fraction of that of the SUVs, and even not being as strong during their peak, the D-segment is a study that should reveal the time travel of the Indian passenger vehicle space. Affected extensively by the proliferation of SUVs at various price points, the D-segment is all but gone. The recent figures by SIAM indicating that SUV acceptance has increased steadily, and has grown to be more than the total sales of sedans and hatchbacks combined in the April-June quarter of 2021, the D-segment, it is clear, has shrunk drastically. With the B-SUVs (like Maruti Suzuki Brezza, Hyundai Venue, Tata Nexon) eating into the C-sedan segment and the larger C-SUVs (like KIA Seltos, Tata Harrier, Hyundai Creta) taking a pie out of the D-sedan segment, what was once considered as the most coveted has now been relegated to soldier on with much difficulty.

With India refusing to shift from being a price sensitive market, and with a certain purchasing power equation always present, the growth in SUVs that come at desirable price points with an aspirational value to talk about, the D-segment, it may be an exaggeration to say is on its last legs. Undercutting sedans when it comes to pricing, SUVs are proving to be the ruthless D-segment killers. Presenting a strong perception regarding ‘value for money’, it is they that are providing no chance for even the existing D-segment contenders to have much leeway. They may be world-class and highly regarded the world over, but the D-segment cars like the Skoda Octavia and Hyundai Elantra look like they are up against a wall. Made from Completely Knocked Down (CKD) kits that are weighed by the cost versus volume considerations, the D-segment cars that exist suffer from a significant cost disadvantage. Add low demand, and it is not surprising for Skoda to position the new Octavia within rubbing distance of the Superb in terms of price and features. Such is it that those looking for ventilated seats could go for the Superb and those not needing them could for the Octavia!

With such fine differentiation defining the current crop of vehicles that make up the D-segment, a big shake down does not seem far away. It could be driven by regulations and market requirements for certain. Already dissuading many OEMs to drop their D-segment offering, regulations like BS VI have indeed been a big factor. The other has been the availability of SUVs at price points that correspond with D-segment sedans. A big plus concerning SUVs is the status and lifestyle image they present. The other is their ability to travel over rough terrain and provide good visibility due to the high seating position. Providing a sense of invincibility, SUVs seem to offer more than a D-segment sedan could, today. At the top, it has increasingly come under pressure from luxury sedans and other offerings from brands like Audi, Mercedes-Benz and BMW. Some of the entry-level products from these OEMs don’t cost a premium. Owning used luxury cars has also become easy as their volumes have risen. This too has put pressure on the existence of the D-segment without any doubt. W ith the Octavia taking a position within close proximity to the Superb, the future of D-segment, at best, looks tough. This, even with the talk of the new Elantra being introduced gaining force with every passing day. Unless Hyundai unleashes the Elantra with some novel trick up its sleeve, there’s not much left to talk about the once glorious D-segment. (MT)

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 India’s automobile industry delivered a mixed performance in the first quarter of 2025-26, with passenger vehicle exports reaching an all-time high even as domestic sales remained largely flat, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Monday.

Passenger vehicle sales crossed the one million mark for the second consecutive year in Q1, reaching 1.01 million units, though this represented a 1.4 percent decline compared to the same period last year. The segment’s performance was buoyed by utility vehicles, which now account for 66 percent of passenger vehicle sales and posted 3.8 percent growth, whilst passenger cars declined 11.2 percent.

The standout performer was exports, with passenger vehicles achieving record Q1 exports of 204,000 units, marking a 13.2 percent year-on-year increase. This surge was driven by stable demand across most markets, with particularly strong performance in the Middle East and Latin America, alongside recovery in neighbouring markets such as Sri Lanka and Nepal.

"The performance of the Auto industry was relatively flat, though the retail registration for Passenger Vehicles, Two-Wheelers and Three-Wheelers were marginally higher than the previous Q1," said Shailesh Chandra, President of SIAM.

The two-wheeler segment faced headwinds with wholesale sales declining 6.2 percent to 4.67 million units due to inventory correction across the industry. However, retail registrations increased 5 percent during the quarter, driven by the marriage season and positive demand sentiments. Two-wheeler exports showed robust growth of 23.2 percent to 1.14 million units.

Three-wheelers achieved their highest-ever Q1 sales of 165,000 units, representing marginal growth of 0.1 percent. The segment benefited from increased economic activity supporting urban transportation demand and easier financing options. Exports in this category surged 34.4 percent to 96,000 units.

Commercial vehicles posted a marginal decline of 0.6 percent to 223,000 units, though exports grew strongly by 23.4 percent to around 20,000 units.

Looking ahead to Q2, SIAM expressed cautious optimism despite ongoing challenges. The upcoming festive season is expected to drive demand, particularly for passenger vehicles and two-wheelers, whilst an above-normal monsoon could aid rural income recovery.

"With the upcoming festival season coupled with the benefits of RBI repo rate cuts, we expect consumer sentiments to improve," Chandra added.

The Reserve Bank of India's cumulative repo rate cuts of 100 basis points over the past six months are expected to gradually ease borrowing costs, potentially boosting consumer sentiment and affordability.

However, supply-side challenges persist, particularly the recent export licensing requirement from China on rare earth magnets, which has raised concerns for original equipment manufacturers across all categories.

"Sales of Passenger Vehicles in Q1 of 2025-26 de-grew by (-) 1.4 percent, posting sales of 1.01 million units as compared to Q1 of previous year," said Rajesh Menon, Director General of SIAM.

In June alone, passenger vehicle sales declined 7.4 percent to 312,849 units, whilst two-wheeler sales fell 3.4 percent to 1.56 million units. Three-wheeler sales bucked the trend with 3.8 percent growth to 61,828 units.

The industry's overall domestic sales fell 5.1 percent in Q1 to 60.75 million units, reflecting the challenging operating environment facing India's automotive sector.

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Czech automotive brand Skoda Auto India has announced that it has achieved a new milestone by surpassing 300 customer touchpoints in the country. With this, the OEM has a network of touchpoints in 172 cities across the country and is rapidly expanding its presence in not just tier 1 cities, but also tier 2 and tier 3 markets.

Interestingly, 86 percent of the recent expansion have happened in these geographies and 75 percent of the 300 touchpoints are directly servicing customers in the same cities.

The Czech automaker is marking its 25th anniversary in the country and 130 years globally. It was just recently, Skoda Auto India reported its highest-ever half-yearly sales in the first half of 2025.

Ashish Gupta, Brand Director, Skoda Auto India, said, "Our growing network makes our product range more accessible to customers, while enabling smarter, faster service with consistent quality, across the country. With a strong emphasis on ‘growing together and getting closer to customers’, a large part of our expansion has been undertaken with Skoda Auto’s long-term dealer partners in India, while also bringing new partners with a proven track record of customer centricity into the fold. This expansion is a step forward in strengthening Skoda Auto’s legacy in India and delivering on our promise of safety, value, and a truly rewarding ownership experience."

The expansion the company shared perfectly complements its product strategy, which has been significantly boosted by the Kylaq SUV, joining the Kushaq and Kodiaq to offer an ‘SUV For Everyone.’ The Slavia continues the brand's sedan legacy, with a new global icon expected to launch in India soon.

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Hyundai Motor India, one of the leading passenger vehicle manufacturers, has launched a new variant – S AMT – for the Hyundai Aura sedan at INR 807,700 (ex-showroom).

Powered by 1.2-litre Kappa petrol engine, the Hyundai Aura AMT variant is equipped with Electronic Stability Control (ESC), hill start assist control (HAC), LED daytime running lamps (DRLs), 6 airbags, Tyre Pressure Monitoring System (TPMS) in the highline version and outside rear view mirror with electric folding and turn indicators, thus making the popular offering more attractive.

Tarun Garg, Whole-Time Director and Chief Operating Officer, Hyundai Motor India, said, “At HMIL, we are committed to making smart mobility accessible to a wider set of customers. The introduction of advanced AMT transmission in Hyundai AURA S AMT reflects our continuous efforts to democratise technology and enhance convenience for customers. With this introduction, we aim to redefine the value proposition in the entry segment by offering superior comfort, safety, performance and convenience at an affordable price.”

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Japanese auto major Nissan Motor Co has secured around USD 6 billion through long-term bonds, which will support its medium to long-term strategies.

The company shared that the funding raised through bond issuance was oversubscribed, which confirms investor confidence in the Re:Nissan recovery plan. The funds have been raised for longer tenors (4-year to 10-year tenors).

Nissan shared that it intends to use the net proceeds raised through the US dollar and euro offerings for general corporate purposes and upcoming bond maturities, including those in fiscal 2025.

Furthermore, the net proceeds from the convertible bonds are intended to be used by fiscal year 2030 for investments in new products and technologies such as electrification and software defined vehicles (SDV).

The Japanese automaker aims to strengthen its financing capabilities and maintain strong liquidity in its automotive business to support the goals in Re:Nissan.

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