The diminishing presence of sedans as more buyers move away from traditional 3-box bodystyle sedans to two-box SUVs will intensify further with the impending launch of the 2021 Perodua Ativa (D55L).
Previously, this trend was only observed in the higher range D-segment Toyota Camry/Honda Accord and C-segment Toyota Corolla Altis/Honda Civic class of vehicles, as buyers move to the Honda HR-V/Honda CR-V/Proton X70.
At the lower-end of the affordability spectrum, traditional B-segment sedans like the Toyota Vios/Honda City/Proton Persona still make up a bulk of the respective brands’ sales. Honda for example, relies on the City for about 30 percent of its sales. Maintaining that volume in the coming years is going to become increasingly difficult.
Perodua has since announced estimated prices and preliminary specifications for the Perodua D55L, which we now know will be launched as the Perodua Ativa.
The prices were very close to WapCar’s own estimates made earlier, ranging from RM 62,500 to RM 73,400. There will be 3 variants, all powered by the same 1.0-litre 3-cylinder turbocharged 1KR-VET engine (basically a turbocharged variant of the Perodua Axia/Bezza’s engine), paired to a D-CVT (Dual Mode CVT - not to be confused with Toyota’s Direct Shift CVT, they are two different CVTs).
In terms of features, the Ativa trumps all its rivals. Even the cheapest RM 62,500 (estimated) Perodua Ativa 1.0 X already comes with more safety features than the Proton X50 Standard (from RM 79,200), never mind the Vios or the City.
Standard features include 6 airbags (versus 4 in the Proton X50 Standard), electronic stability control, hill start assist, autonomous emergency braking (AEB, referred to by Perodua as ASA), lane departure warning and prevention.
The highest specifications 1.0 AV adds automatic bending/focusing adaptive LED headlamps (Perodua calls it Adaptive Driving Beam), something which is not available even on many higher range cars costing over RM 150k! On top of that, the Ativa 1.0 AV also comes with adaptive cruise control and Lane Keep Control, which means that it has semi-autonomous driving capability.
In layman terms, it simply means that under certain conditions, the Perodua Ativa is capable of driving itself (yes!), albeit only for a brief moment. Legal liabilities and compliance issues mean that manufacturers have to limit semi-autonomous driving functions to around 10 seconds (specifications to be confirmed). The driver must always be responsible for operating the vehicle. These features are merely to assist the driver.
So where does this put the Toyota Vios and Honda City? The two leading non-national cars on sale in Malaysia.
The Vios is priced from RM 74,623 to RM 95,284, while the Honda City is priced from RM 74,191 to RM 86,561. The often-forgotten Nissan Almera (shame, because it’s a super competent car that rides and drives way better than its price suggests) is priced from RM 79,906 to RM 91,310.
None of these options are able to match what the Perodua Ativa currently offers. At the moment, the Japanese makes still have ample breathing space because Proton still can’t get its act together yet.
Despite securing over 40,000 bookings for the Proton X50, Proton was only able to deliver less than 10 percent of the bookings. Complaints from early adopters on after-sales woes and parts shortage also don’t instill much confidence in buyers.
So far, impact from the Proton X50 to the Toyota Vios and Honda City is not as bad as expected. The Perodua Ativa however, could just push things over the cliff.
But it’s only a matter of time before Proton irons out issues with its supply chain and parts inventory management.
2021 will be remembered as the beginning of the end of B-segment sedans. Once the staple of the Malaysian car market, the segment is now helmed in at both ends – the Perodua Ativa at the lower-end and the Proton X50 at the upper-end.
As for B-hatchback models like the Honda Jazz/Toyota Yaris, it's hard to tell if these will be affected as much as their sedans counterparts.
Ever since MyCC’s barred the Malaysian Automotive Association from sharing detailed breakdown of vehicle sales data over some stupidly irrational imagination of hyper competitive car companies cooperating to form cartels, the local industry no longer has visibility on such matters.
Retreat to regroup, Honda WR-V will be coming to Malaysia
Although the low price and high features of the Perodua Ativa is a surprise to many, it is not unexpected. Tax advantage enjoyed by our quasi-national Proton and Perodua aside, the shift away from sedans has already started in Japan more than 20 years ago.
The first generation Toyota RAV4 started the trend in Japan in 1994, followed by the upmarket Toyota Harrier. Today, the latest Toyota Yaris Cross is now Japan’s best-selling model, outselling the Honda Jazz. B-segment sedans like the Honda City and Toyota Belta (Vios) are no longer sold there.
Seeing this similar shift in trend is happening in Malaysia does not surprise them, but everyone has to admit that the Perodua Ativa will speed up the transition here faster than expected.
In response, you can be certain that the leading Japanese makes will introduce a smaller SUV to slot below the Honda HR-V/Toyota Corolla Cross class of vehicles in the near future.
After nearly 25 years in the market, the B-segment sedan genre, first made popular by the first generation Honda City sedan in 1998 (in Malaysia), will soon be reaching the end of its relevance.
This is a normal product lifecycle. Remember that the Toyota Vios and Honda City were created in the late ‘90s, also about 25 years ago, to fill the gap left behind by the Toyota Corolla and Honda Civic, which has grown to be too expensive for its traditional group of customers.
A quarter of century later, we will now see the cycle repeat itself with a new generation compact SUVs, which will only stretch the loosely defined B-segment range further.
Some insist the Perodua Ativa is an A-segment vehicle, but this is a pointless academic debate to engage in because consumers will shop and compare as they see fit, according to the size of their bank accounts.
Honda is reportedly working on a new entry-level SUV, slotting below the HR-V. It will most likely use the WR-V nameplate but the all-new model will be totally different from the current Honda WR-V that’s now on sale in India and Brazil.
The Toyota Yaris Cross will also eventually spawn a lower cost variant for developing markets. In its current form, the TNGA-B platform Yaris Cross is still too expensive for our market.
Nissan already has the Nissan Kicks. It’s already on sale in Thailand and introduction in Malaysia is in the plan. However, poor economic outlook and diminishing market potential for non-national brands in Malaysia is slowing progress.
With sales of their core Toyota Vios and Honda City models coming under severe pressure, 2021 will offer no respite to Honda Malaysia and UMW Toyota Motor, not forgetting Edaran Tan Chong Motor’s Nissan Almera, which we have to repeat once more, is really a super impressive entry-level sedan.
Sedans to be re-interpreted
Just as the Civic managed to stay relevant by re-inventing itself as a low slung, affordable sports-ish sedan, and how the Toyota Camry is now nothing like its predecessors, the B-segment sedan genre is not going away.
Instead, it will be re-interpreted with a different, sportier product concept. Perhaps that’s a good thing. Now that these cars don’t have to do everything and trying to appease everyone, they can have a narrower focus.
The Toyota Vios GR-Sport, with its very spot-on suspension tuning and remarkable handling (review to come soon), is a preview of the future of B-segment sedans.