SUV surge: Hyundai grabs a quarter of the SUV pie

Hyundai Motor India increases market share in the overall SUV segment from 22.71% in CY2019 to 25.48% in CY2020

In the calendar year 2020, the market share of Hyundai Motor India Ltd (HMIL) in the passenger vehicle (PV) segment reached the highest ever—to 17.4% (in wholesale as well as in retail), up from 17.3% in 2019. One of the reasons is HMIL riding the SUV wave. According to industry sources, while in CY2015 SUVs contributed 13.5% to overall PV sales, in 2019 this rose to 25.6%, and further to 29% in 2020. And of the 7.2 lakh SUVs sold in India in 2020, HMIL sold 1,80,237 units. This was led by the Creta (96,989 units) and the Venue (82,428 units), and this helped the company increase its sales share in the overall SUV space from 22.71% in CY2019 to 25.48% in CY2020.

Of the 12 models HMIL sells in India, four are hatchback cars, one electric, three sedans, one in the fleet segment, and three SUVs—and these three SUVs contributed to about 42% total company sales in 2020.

Tarun Garg, director, sales & marketing, HMIL, says that the company’s strategy of launching the new Creta and the new Tucson in 2020, supported by the Venue launched in 2019, as also dozens of variants with different transmissions, engines and fuel options, contributed to growth.

In fact, in 2020, the Creta became India’s largest selling SUV across segments. Not discontinuing diesel engines post-BS6 emission norms also helped. Garg says that, as far as sales of the Creta are concerned, 60% come from the diesel engine variant. “It shows that the demand for diesel vehicles, especially midsize SUVs, is substantial, if a carmaker can offer a good product at a good price,” he says. In certain markets such as Punjab, as much as 79% sales of the Creta are of the diesel engine variant—as also in Andhra Pradesh (76% diesel), in Uttar Pradesh (70% diesel), and in Rajasthan (71% diesel). “Even in the sub-4 metre SUV such as the Venue, 38% sales were of the diesel engine variant.”

The ‘choice’ route

In addition to the pent-up demand and a section of commuters shifting from public transport to private vehicles post-lockdown, what has helped overall sales of Hyundai cars in particular is the sheer amount of choice on offer.
HMIL currently offers hatchbacks, sedans, SUVs and an electric car. As far as fuel options are concerned, it sells seven different petrol engines (four naturally-aspirated and three turbocharged), four diesel engines, two CNG engine options, and one electric. The company also has a wide range of gearbox options: two manual, one iMT, and five automatic (AMT, 6AT, 8AT, IVT and DCT).

“The aim is to be in the consideration set of any Indian buyer for any type of mobility need related to four-wheelers,” adds Garg. “Be it owning a new car or a used car for shared mobility or even subscribing a car, we have an option.”

Customers aren’t downgrading

Garg says that while after the lockdown there was an apprehension that car-buyers may downgrade from feature-rich variants to basic ones, perhaps due to muted economic sentiment and salary cuts, this has not happened. “At least at Hyundai we have seen people are not downgrading. For example, in the new Creta, about 60% bookings went to the variant that has a panoramic sunroof, and even in the hatchback i20 85% of the demand is coming from the Sportz and above variants. It shows that a car is still an aspirational buy and customers aren’t really compromising on features,” he says.

Within the hatchback segment, while the company’s new i20 and even the Grand i10 Nios have seen increasing demand, sales of its entry-level hatchback, the Santro, have not grown at a similar pace—these, in fact, have come down from about 8,000 units per month when the new-generation Santro was launched in late-2018 to about 3,000 units now. Garg says the first-time car-buyer is upgrading to bigger hatchbacks. “In 2015, the compact low hatchback sub-segment contributed to 13.4% overall sales, compact mid 12.5%, compact high 14.8% and compact premium 8.2%. In 2020, the compact premium hatchback sub-segment improved its sales share from 8.2% to 13%, and this shows that more and more customers now prefer compact premium hatchbacks over entry-level hatchbacks.”

Hyundai SUV sales 2020

Creta: 96,989
Venue: 82,428
Kona EV: 223
Tucson: 597
Total: 1,80,237

Market share of Hyundai in SUVs
2019: 22.71%
2020: 25.48%

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