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BW Businessworld

Auto: Bolder Choices

SUVs now have a bigger market in India as car buyers here look beyond hatchbacks and sedans

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Small cars and sedans have been synonymous with Indian car buyers, but lately the trend of Sport Utility Vehicle (SUV) has hit the Indian shores. In 2017-18, sale of SUVs in India grew much faster than passenger cars — fueled by new age compact models and the fast changing lifestyle. According to numbers released by the Society of Indian Automobile Manufacturers (SIAM), 9.2 lakh SUVs were sold in 2017-18 compared to 7.6 lakh a year ago, while growth in passenger car segment has slowed with sales at 21.7 lakh units in 2017-18 to 21 lakh units in 2016-17.

Says SIAM director general Vishnu Mathur, “For the first time more than one million SUVs were manufactured in India. SUVs are aspirational and have grown six times faster than passenger cars in FY18. We are certain that going forward, this segment will grow manifold.”

On the subject of SUVs, Hyundai India, responding to an email query by BW, said, “Car owners in the Indian market are now looking at redefining their driving experience and the numbers clearly show an increasing liking for SUVs, especially among young buyers. We will strengthen our commitment to the Indian market by launching eight new products between 2018 to 2020 which will include an electric SUV and a Sub 4 Meter Compact SUV.”

Affordability is a key factor in the rise in sales of SUVs in India. Maruti’s Brezza, Ford’s EcoSport, among others are available under Rs 10 lakh (ex-showroom). With easy finance options available, many can live their dream of owning a SUV. Ford’s EcoSport kickstarted the compact SUV segment with its launch in 2013 and ever since, this category has seen many entrants such as Maruti Brezza, Mahindra TUV300, Honda WRV and Tata NEXON. The choice for the price-conscious buyer is far wider now, driving volumes for the manufacturers.

Says S.N. Barman, vice-president of sales, PV Business Unit, Tata Motors, “This trend (of SUVs) is also seen as an outcome of people’s preference towards feature-rich lifestyle vehicles which are an extension of their personality. Following this trend, our current SUV portfolio consisting of Hexa and Nexon has grown from strength to strength.”

Premium SUVs
While affordable compact SUVs are driving the volumes for car makers, the premiums have seen a strong demand as well. Hyundai Creta has consistently been a popular SUV. Fiat Chrysler Automobiles (FCA) India, which has seen a strong response with its Jeep Compass, is also working on launching Jeep Renegade to compete in the sub-compact SUV segment.

“We have locally manufactured and sold over 25,000 Jeep Compass SUVs. It is really encouraging to witness how positively the Indian market has responded to Compass and we are planning to make the Jeep Compass package even more desirable by adding additional derivatives,” Kevin Flynn, president and managing director, FCA India.

Mahindra too has further enhanced its portfolio of SUVs with the likes of KUV100, priced in the range of other compact cars in the sub four-metre segment.  The company claims that it makes a strong case for itself providing a SUV feel factor at a relatively low cost.

Luxury & Ultra-Luxury Segments
With SUVs now the largest segment in the automotive world, luxury car makers have realised the potential of this market. Almost all luxury, ultra-luxury and supercar manufacturers are jumping on the SUV bandwagon. While Rolls Royce recently launched its first SUV ‘The Cullinan, Maserati brought out ‘Levante’, Lamborghini ‘Urus’ and Bentley ‘Bentayga’. Porsche, Audi, Mercedes, JLR and BMW all have their full portfolio of SUVs available in India.

Maserati India head of operations Bojan Jankulovski says, “We have seen a tremendous boost in sales in the luxury crossovers and SUVs segments owing to launches of multiple strategically priced models at various price points, coupled with smart financing schemes. Even for Maserati, substantial sales come from Levante and 15-18 per cent of it is from women buyers. We foresee super luxury SUV penetration level will pick up even further.”

The Roadmap

The two biggest carmakers in India, Maruti and Hyundai, are planning to grow their SUV portfolio. Currently, Maruti has only Brezza and S-Cross on sale in India and is working on more such products for the domestic market. Hyundai, on the other hand, has lined up its compact SUV Kona for India apart from the all-new SantaFe. Mahindra is launching XUV700 and Marazzo in the MUV segment. Skoda is working on Karoq, while Tata Motors is set to launch the Harrier.

In the coming years we will see a series of SUV launches in the country spanning all segments in keeping with the global SUV trend. Despite high fuel costs and taxes on the segment, SUVs are here to take a substantial chunk of the Indian auto market.

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magazine 1 september 2018 auto makers auto suvs luxury cars