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The Indian passenger vehicle (PV) market is expected to witness a significant development with the sales of SUVs expected to surpass car volumes very soon. Going forward, the momentum is expected to continue, with the share of SUVs estimated to exceed 60 per cent of the PV market.
In the post-lockdown phases, the SUV segment has been reporting explosive growth in volumes. In Q1 of FY22, the share of SUVs was estimated at 38-40 per cent, up from 32 per cent in FY21 and 26 per cent in FY20.
As a result, the sales gap between SUVs and cars has been narrowing. It was just 6,000-plus units in July 2021 when SUV sales stood at 1,24,057 units against car volumes of 1,30,080 units. The gap was 26,000-plus in June 2021.
SUV revolution
The changing aspirational and driving needs, and numerous new launches at preferred price points, have aided the SUV revolution in the country. The sedan segment has been impacted deeply due to this shift, with its share dropping to 10 per cent now from 23 per cent five years ago.
Industry analysts say that buyers have started to shift to SUVs due to their higher stance and seating positions, which provide greater road visibility when compared with cars. Also, the current SUVs offer much more features than premium cars.
“The aspiration levels of Indian car buyers were always on the SUV side. Earlier, there were not many SUVs fitting into their aspirations and pockets. Now, there is a range of SUVs in the price bracket of ₹6 lakh to ₹12 lakh, while the second range of SUVs comes in the price bracket from ₹9-10 lakh to ₹20 lakh.
“So, this segment has the right products and price points now to attract buyers. SUVs will maintain a strong momentum and garner 60-70 per cent share in the market, going forward. The shift towards SUVs is going to be permanent,” says Sanjeev Garg, Practice Leader-Automotive, Praxis Global Alliance.
SUV market leaders such as Maruti, Hyundai and Mahindra are sitting on a huge order book for SUVs, while Renault, which triggered the SUV revolution in India with the launch of Duster, continues to boost its share with a new range – Kiger and Triber.
Huge order book
Though the shortage of semiconductors has caused some production constraints, booming SUV sales has also led to car makers adjusting their productions in favour of SUVs to fetch higher margins during this pandemic-induced period. “SUVs are making up a large chunk of the market. Also, many new SUVs have been launched, so naturally OEMs will ramp up production of those models to cash in on the novelty factor of the models,” says Ashim Sharma, Partner & Group Head Business Performance Improvement Consulting at Nomura Research Institute.
New opportunities
Indians’ growing love for SUVs has also thrown open new opportunities for companies such as Nissan, which has been struggling to improve its share despite being present in India for a decade.
Nissan’s recently launched compact SUV Magnite has garnered more than 60,000 bookings, and has been helping the company accelerate sales. Brands such as Skoda and Volkswagen are also betting on their new SUVs to boost sales.
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