SUVs zoom past the rest

Vijay C Roy

A minute’s stop at a traffic signal in any major city and one can witness the craze and love for SUVs. With the profile of the customer changing over the years from a hardcore off-roader to a typical urban-dweller automakers are fuelling the demand even further, making the sports utility vehicles the fastest growing four-wheel segment in India. That, too, despite the inordinately long waiting periods.

Chandigarh-based Nikhil Vardhan, a 31-year-old banking professional, waited for nearly four months to get his compact SUV, Hyundai Venue. “I bought the car because it is value for money, has great looks, comes with a lot of features and above all, the high ground clearance is ideal for hills,” he says,

Similarly, Gursharan Kaur (36), an educator, was bowled over by Mahindra Thar’s rugged body-built. Though she was told that she would have to wait for nearly a year, it did not deter her.

“If we consider the average age of ownership for SUVs, it would be around 36 years,” says Shashank Srivastava, senior executive officer, marketing and sales, Maruti Suzuki India Ltd.

Number of vehicles sold

In 2022-23, passenger vehicle sales in India grew by 27 per cent to 38.9 lakh units. The share of SUVs and MPVs (Multi Purpose Vehicles) was around 51.5 per cent. The sales increased from 14,89,219 units in 2021-22 to 20,03,718 units in 2022-23.

SUVs account for about 43 per cent of the total sales of passenger vehicles in India. SUVs have sub-segments such as entry or compact, mid-size and premium. In the last fiscal year, the sales volume was dominated by the compact segment (8.7 lakh), followed by mid-size (7.61 lakh) and premium (42,300). Tata Nexon retained its position of India’s bestselling compact SUV with the sale of 1,72,138 units, followed by mid-size Hyundai Creta (1,50,372) and Maruti Brezza (1,45,665).

The entry-level SUV segment now has the largest share in the domestic passenger vehicle market, overtaking the premium hatchback vertical which has dominated the market since 2011.

What’s propelling demand

“The Indian market is in sync with the global market. One of the major reasons for the growth of the SUV segment has been the customers’ liking for vehicles with a high stance, high ground clearance and a host of features,” says Sanjay Dahuja, managing director, Berkeley Hyundai, Chandigarh.

Analysts say the customer seeks self-gratification and also wants to project a powerful image. The go-anywhere capability to negotiate patchy roads and the monsoon are also factors fuelling the demand for SUVs. Above all, the vehicles come loaded with features and technology that are required for off-roading.

Flurry of launches

The maximum model launches in the last six years in the entire passenger vehicle segment have been in the compact and mid-level SUV space. The entry-level SUVs have seen a tremendous increase in demand over the last few years. Initially, only two models were available in 2016: Brezza and EcoSport. “In the last fiscal, 47 SUV models spread across all categories were competing against each other. This year, the number will touch 55,” says Srivastava. It is expected that the share of SUVs will touch 47 per cent this fiscal year compared to 43 per cent last year.

Banking on SUVs

Maruti is planning to double its SUV sales as it eyes the leadership position in the fast-growing segment with a market share of over 24-25 per cent. It had sold 2.02 lakh SUVs in the last fiscal with a market share of nearly 13 per cent. However, in FY24, the company aims to sell around five lakh units.

For the company, Brezza is leading the entry SUV segment while the full impact of Grand Vitara in terms of sales is also expected to come into play this year. The addition of Jimny and Fronx would help bring in additional volumes this fiscal, says Shrivastava.

Maruti has already received close to 1.5 lakh bookings for the four models: Brezza, Grand Vitara, Jimny and Fronx.

Similarly, Honda is looking at driving in nearly half-a-dozen SUVs over the next eight years, starting with Elevate. Unveiled recently, the 1,500 cc petrol off-roader will take on rivals such as Hyundai’s Creta, Kia’s Seltos and Maruti’s Grand Vitara.

Mahindra & Mahindra is also looking at maintaining its leadership position in the SUV segment in the current fiscal with demand remaining robust for its model range. The company clocked the highest-ever annual sales of its SUVs at 3,56,961 units, registering a growth of 60 per cent. Sitting on an order backlog of about 2.92 lakh units for SUVs, the company plans to ramp up production by the end of the year, as it looks to cut the waiting period of various models.