Often the growth indicator of the auto sector, particularly how well the middle-class is coping with life, it’s no surprise that the B-segment (think Myvi, Saga, Vios, City) constitutes close to 40% of the Total Industry Volume (or the total number of vehicles sold in a calendar year) – the largest segment in Malaysia by far.
Facing little in the way of competition, at least in terms of price, the Perodua Myvi and Proton Saga are easily the best-selling hatch-back and sedan within this segment. Collectively, these two national models contributed about 140,000 units to the TIV in 2014, which chalked 666,456 units in total. But more interesting is what do these owners upgrade to after “outgrowing” their national rides? And this is where a titanic struggle is being played out between the non-national brands as they try to win over upgraders from the national brands and secure their loyalties in the long term.
Which B-sedan did well in 2014?
Malaysians reaffirmed their fondness for the three-box sedan in 2014, most notably for the new and revised Toyota Vios which was launched in late 2013. It regained top spot in 2014 with a record-breaking 42,100* units sold after ceding the crown to the Nissan Almera in 2013. Prior to the Almera’s debut in late 2012, the Vios had been the undisputed B-sedan sales leader. The Honda City, all-new for 2014 and introduced with four variants (previously two) at lower price points, charged up to second spot with 36,700* units (another new record). In the face of newer rivals, the Almera slid to third spot but still managed a respectable 24,800* units. Beyond the “big three” Japanese brands, the Mitsubishi Attrage registered a distant fourth with 2,500 units of sales, the Volkswagen Polo sedan at 2,400 units and the Ford Fiesta sedan at 700 units for the year.
So it’s a straightforward win for the Vios then?
Not comprehensively so. The new City was launched in March 2014 and deliveries only started in earnest in April. So if we are to look at the period from April to December 2014, the numbers tell a different story with the City delivering 33,700* (averaging 3,750 uts/mth) cars to customers, compared to the Vios at 31,300* units (3,480 uts/mth) over the same period. Being a newer model, the City was always going to have an advantage, but the Vios was by no means aged as it was launched only six months prior to the City in October 2013.
What about 2015?
The Honda City is looking strong. Based on unofficial 2015 sales data up till April, it appears that the City has now firmly established itself to be Malaysia’s favourite non-national B-sedan with an estimated 12,000 units sold from January to April 2015, this despite Toyota having upgraded the features of the Vios line-up in January. If anything, the Nissan Almera sneaked into the No. 2 position with approximately 8,400 units finding its way to owners following the introduction of its mid-life facelift model (also in January). Like a game of musical chairs with its Japanese compatriots, Vios found itself pegged back in third spot with close to 7,700 units sold in the first four months of this year.
What does this mean?
Anyone requiring any indication of how competitive it is at the sharp end need not look beyond the on-going battle being played out in the B-sedan segment. Of course, Toyota is not taking this lying down and have just announced a comprehensive promotional campaign for the Vios where customers can choose from a range of attractive packages to accompany their purchases; from low interest financing to cash rebates, and even attractive trade-in valuation. While the benefactors may be those eyeing the Vios, this latest promotion will most likely trigger a response from its closest rivals, so expect more discounts from other brands. All of this may be great news for consumers, but it remains to be seen whether the car brands can absorb lower margins over an extended period, more importantly, will they even find enough buyers out there to capitalize on what looks like yet another wave of discounts and promotions?
* All figures are rounded up
(Proviso: Sales numbers were obtained from various sources. As much as we endeavour to be accurate, this author failed to nail an A for Additional Mathematics in SPM, so please don’t hang us).