Two out of five car buyers in the Indian market opted to purchase SUV in the first five months of the year, cementing consumer preference for body style in a market where hatchbacks made up nearly half of sales of SUVs seven years ago in 2015.
Due to the increasing demand, automakers are pulling out all to offer feature-rich entry-level SUVs, which, with a share of 21%, has become the largest segment in the local market.
Market leaders Maruti Suzuki and Hyundai Motor India are ready to battle with the launch of all new Brezza and Venue versions this month to cement their presence in the highly competitive segment like the likes of
Tata Motors and Kia India, as many as 638,000 entry-level SUVs were sold in the local market last year, ahead of premium hatchbacks whose sales amounted to 365,000 units in the period under review.
As many as 41% of passenger cars sold between January and May 2022 were SUVs, up from 13.5% in 2015. The share of hatchbacks decreased from 49% to 35% in the same period.
The major Korean automaker Hyundai, which has dominated the SUV segment for the past two years (2020 and 2021), is confident of maintaining its leading position in the future. “As of now, what you see in the market is based on supply (as chips shortage affects production globally), not on demand,” said Tarun Garg, Director (Sales, Marketing and Service) for Hyundai Motor India, adding that even the outgoing site has backorders of 20,000-25,000 units. The place accounted for 42% of Hyundai SUV sales in 2021.
Garg was speaking on the sidelines of the launch of the new site at a price of Rs 7.53-9.99 lakh (ex-showroom, India), which has already received 15,000 additional bookings.
Hyundai sold about 250,000 SUVs in India to retain the market leadership with a 22% share of the space in the fiscal year ending March 31, 2022. However, Hyundai Motor India and Tata Motors have been close in monthly volumes in SUVs in recent months thanks to an increase in Tata Punch Sales. Tata Motors sold 205,000 SUVs with an 18% stake in FY22. Mahindra and Mahindra acquired 14% (excluding Bolero) in the same period. Maruti Suzuki, with a sole model Brezza, had a share of about 12%.
Given the traction of the market, Garg expects that the share of SUVs in the domestic market will increase in the coming months. “Compact SUVs already account for half of all SUV sales. It is a very important statistic because what it means is that first-time buyers may now be transitioning from hatchbacks to compact SUVs.”