SUV sales grow 7 times faster than cars in FY18

NEW DELHI: If you thought that small cars and sedans are where the heart of the Indian buyer is, think again. Sale of SUVs grew seven times faster than that of passenger cars in 2017-18, the trend being fuelled by new models and changing lifestyles.

While small cars and sedans managed a growth of 3% in the last financial year, the sales of off-roaders grew 21%, the fastest in the personal commuter segment, which also includes scooters (20% growth) and motorcycles (14%). And, the share of SUVs in overall passenger vehicle sales rose to nearly 30% in 2017-18, compared to 14% recorded at the end of March 2010.

According to numbers released by the Society of Indian Automobile Manufacturers (Siam), 9.2 lakh SUVs were sold in 2017-18 against 7.6 lakh units in the previous year. The non-SUV segment (compact cars and sedans), while accounting for larger volumes, has been near-stagnant in terms of growth — sales stood at 21.7 lakh units in 2017-18 against 21 lakh units in 2016-17.

SUV

Market analysts said the trend is only going to get stronger as SUVs will continue to remain favourite with Indian buyers and companies will drive in new models. “SUVs are the order of the day, in line with global trends, and will continue to remain strong,” Rakesh Srivastava, director (sales & marketing) at Hyundai India, told TOI.

For Hyundai, share of SUVs in total sales has grown to a little over 20% now, against less than 10% before 2015. The company’s entry SUV Creta (price starts from under Rs 10 lakh), has driven this change. “SUVs are naturally suited for the Indian geography with a large road network. Their strong body architecture, higher seating position and relatively-larger cabin space make them highly desirable with buyers,” Srivastava added.

Affordability has also led to the rise in sales of SUVs. Models such as Maruti’s Brezza and Ford’s Eco Sport are priced under Rs 10 lakh, enabling many people to fulfil their desire to own an off-roader.

“SUVs have always been highly aspirational. Earlier they were very expensive. With the entry of affordable options, people have really fallen for them. For many, SUV is a lifestyle statement and an extension of their personality,” said a senior industry official, requesting anonymity.

But while affordability is driving in volumes, the trend is equally strong in premium and luxury categories. Jeep Compass (starting from Rs 15 lakh), the first locally-built SUV from Fiat Chrysler India, has seen a strong response.

“The Compass took consumer aspiration to the next level. We have already sold over 20,000 units in just eight months, and are working on new orders,” a senior official at Jeep’s parent Fiat Chrysler said. “This kind of demand demonstrates Indian market’s appetite for SUVs.”

The company is now working on another SUV Renegade, to be priced lower than Compass.

Mercedes-Benz, that leads the luxury market in India, gets nearly 35% of its sales from SUVs, including models such as GLC and GLE. “Indian customers have a penchant for SUVs and they are preferred for better road presence, proven off-road capabilities, practicality, and also for travelling with families,” Roland Folger, MD & CEO of Mercedes-Benz India, said. economictimes


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