Sales of sport-utility vehicles or SUVs have risen worldwide in the last few years. In 2019, 47.4% of vehicles sold were SUVs while sedans stood at 22.1%. And between 2010 and 2019, China saw the share of SUVs in car sales jumping from 14% to 44%.
Indians are also buying SUVs like never before and this is not going to stop anytime soon. In 2015, the share of hatchbacks in India’s total passenger vehicle sales was at 49%, compared to SUVs’ 14%.
Compare that to 2021. SUVs contributed around 38%, growing from 29% in 2020. This is almost equal to the hatchback segment, which now commands a 40% share in the country’s passenger vehicle sales.
Hyundai Motor India has maintained its pole position in the segment. The company has five models in its SUV portfolio and gets half its volumes from them.
Its sister unit Kia, relying on the popularity of the Seltos and the Sonet, said it would exclusively focus on the SUV segment. With their focus on SUVs, the Korean carmakers have gained a foothold in the space.
Led by strong SUV sales, Tata Motors overtook Hyundai Motor India last month to become the second-largest seller of passenger vehicles in the domestic market. Tata Motors has raised the bar in this space, with the mix of SUVs in its portfolio increasing to 52% in 2021, against 37% in 2020.
One of the major reasons that explains the shift to SUVs is their commanding road presence as well as their elevated driving position which gives better control to the drivers. The perception that SUVs are a status symbol is also drawing customers to this segment. Their high ground clearance lets the driver negotiate Indian roads better and smaller SUVs which are seeing robust demand make parking less of an inconvenience.
And with enough options emerging in the compact SUV segment, with prices starting as low as Rs 5.5 lakh, customers looking to buy a premium hatchback or an entry-level sedan see better value for money in a sub 4-metre SUV.
This could be a reason why compact and full size SUVs are now roughly seeing equal amounts of sales, when a decade ago all of the SUV sales in India were in the full-size variety. (chart above, data outdated but pertinent)
This segment has seen more than 50 launches in the last three years, more than sedans and hatchbacks combined.
India’s largest carmaker Maruti Suzuki has been too slow to take advantage of this opportunity. It only has the Vitara Brezza in the sub-4 metre segment and the S-Cross, which is perceived as a crossover by most buyers.
As a result of successful launches by its competitors riding the SUV trend, Maruti’s overall PV market share has fallen from about 50% to 40% in a year.
Carmakers have already lined-up new launches for the year. And with Maruti confirming that SUV would be the company's focus segment in 2022, a battle of epic proportions on the cards in India’s fastest-growing passenger vehicle segment.
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