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SUV account for 3 out of 4 car sales in Rs 12-40 lakh bracket

Indian car buyers are increasingly craving for sports utility vehicles (SUVs) and carmakers are obliging by lining up tens of launches across price segments. One in every four passenger vehicles sold in the country in 2017 was a utility vehicle, and the ratio is reversed in the Rs 12 lakh to Rs 40 lakh bracket where three out of every four cars sold last year were SUVs. In the luxury car space, too, one in every two vehicle sold was an SUV. For a nation known for its small cars, SUVs in all sizes are seen as sign of arriving in life.

“It’s a proven fact that Indians have a penchant for SUVs and this segment remains a growing one,” said Roland Folger, MD at Mercedes-Benz India, which has a largest portfolio of SUVs in the luxury car segment.

“SUVs have some inherent advantages which are best suited for the Indian market, like strong road presence, dealing with bad roads, and also a sense of security,” Folger said. “That’s also the reason we have seen many of our women customers preferring an SUV to drive.”

The utility vehicle segment is expected to cross a million mark within next two years as almost 800,000 SUVs were sold in the country in 2017.
Existing players have lined up about 35 new utility vehicles to be launched in the next three to four years while new entrants such as Kia, PSA and M G Rover are likely to drive in another half a dozen utility vehicles.

Haan Woo Park, president at Kia Motor Corporation, said it makes sense for the company to begin the journey in India with an SUV instead of fighting in the crowded small car space. The company showcased its SUV concept SP2, which will take on the likes of its sister company Hyundai’s Creta and Renault Duster. “We will launch the SP2 next year and will follow that up with another small SUV for the Indian market,” Park said.
To be launched across price segments from Rs 5 lakh to Rs 30 lakh, 75% of the utility vehicles lined up for launch in India would be SUVs. Multi-purpose vehicles are also likely to see some new offerings by select players.

B segment utility vehicles, priced between Rs 7 lakh and Rs 15 lakh, will see most activity with some two dozen new models set to enter a market that already has 15 vehicles (see table).

Sales of utility vehicles have nearly doubled in the Indian market in the last five years, and carmakers expect the segment to grow 14-15% in the next fiscal year when the overall car market is expected to grow 7-8%.

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