Here’s how SUVs are taking the Indian car market by storm
From being a sedan crazy market, India has now evolved to become an SUV loving nation, be it a small entry-level product or a premium crore plus product.
An average Indian car buyer loves SUVs. Be it for the commanding seating position or the road presence, we Indians are buying more and more utility vehicles.
According to the SIAM data (April to October 2019), utility vehicles (SUVs, MPVs, and Vans) comprise over 39 percent of total sales in the country. But, this did not happen out of the blue. Not long ago, during the same period in the financial year 2015-16, utility vehicles accounted for only 20 percent of the sales.
Origin of species
It all started with the Ford EcoSport and Renault Duster. The success story of these two compact SUVs is being aped by carmakers to reap benefits. Not only were these new French and American compact SUVs attractively priced, but, they were also loaded with features that were previously not seen in the SUV segment. In fact, before Duster and EcoSport, affordable UVs in India were bare-bones products, like the Tata Sumo and Mahindra Bolero.
The American carmaker showcased the EcoSport at the 2012 Auto Expo in Delhi. One year and $142 million later, the Ford EcoSport was launched in the country at just Rs 5.59 lakh (ex-showroom, Delhi). That’s the same price at which premium hatchbacks were positioned, giving Indian’s the first taste of a feature-loaded SUV at an affordable price point.
Around the same time, at the Delhi Auto Expo, the French automaker Renault showcased the Duster, an SUV which is derived from its Romanian acquisition, Dacia. Unlike the EcoSport, the Duster, which was first launched in July 2012, carried a premium pricing of Rs 7.19 lakh (ex-showroom, Delhi). And despite having fewer features, the Duster managed to grab eyeballs.
In fact, within a year, the SUV managed to grab a 23 percent market share of the compact SUV segment. Renault even had to triple its production within months of launch.
But why did these two SUVs succeed when home-bred SUV specialists Mahindra could not?
What Ford and Duster did was, offer a product which the Indian market wanted. Tailoring the SUVs for our tastes, both SUVs had ample amount of chrome on the exteriors and power window switches on the doors.
Further, being a chauffeur-driven market primarily, features like rear centre armrest, inclined seats, and rear air conditioning helped these models. Additionally, these SUVs did not skip on safety measures like ABS, Emergency Brake Assist, Electronic Brake-force Distribution, and stability control module.
The era of crossover styled hatchbacks
Buoyed by the rise of SUV culture, carmakers were quick to react to the trend by introducing external black plastic cladding. Volkswagen Polo Cross, Toyota Etios Cross, Hyundai i20 Active, and the erstwhile Fiat Avventura are living examples of this. Most of these hatchbacks did not even get a re-tuned suspension, or increased ground clearance, or even an upgraded engine.
Instead, what these hatchbacks tried to do, was simply play with the external body appearances to lend an aura of ruggedness. Consumers, though, stayed steered clear of these cars by buying either the equivalent hatchback or upgraded to a compact SUV (aka EcoSport and Duster).
However, this little experiment inspired the market leaders to bring their products into the market.
Time for the market leaders – Hyundai and Maruti Suzuki
In 2015, South Korean carmaker Hyundai jumped into the compact SUV foray with the Creta, while Maruti waited for the 2016 Auto Expo to introduce the Vitara Brezza.
With the Creta, Hyundai managed to consolidate its position as the country’s largest exporter of passenger cars. Today, the car is not only doing well in the domestic market with over 7,000 units sold a month since its launch but, also experiencing a strong demand in export markets.
Made in India Creta has experienced demand in Latin America, the Middle East, as well as, Africa. In fact, between April to October 2019, Hyundai exported 25,206 units of the Creta. That’s over 30 percent of the total 82,890 units of the Creta manufactured during the same period.
The Vitara Brezza took India’s SUV love a step ahead. It was the Gurugram-based manufacturer’s fourth attempt in the SUV segment after Gypsy, Grand Vitara, and S-Cross. Despite the recent economic slowdown in the country, Maruti Vitara Brezza has been registering over 10,000 units a month, only second to the Kia Seltos in the utility vehicle segment.
Mahindra also tried to get its share of the pie with the XUV300 but, has met with limited success. However, Hyundai’s second compact SUV, this time through a sub 4m car, the Venue, has become a new segment favourite. The South Korean manufacturer has sold over 51,000 units of the compact SUV since launch, further raising the company’s share in the segment.
Entry-level hatchbacks styled like an SUV
If you believe SUVs are all about toughness and big size, think again. The peculiarity of the Indian market was proven further with the success story of Renault Kwid. The car was launched with several segment-first features, like an LCD instrumentation, large boot space, and a touch screen infotainment system. In fact, some of these features have not been seen even in several segments above it.
The brainchild of the erstwhile Renault CEO Carlos Ghosn was so successful that, the company managed to get over 70,000 bookings in just two months of launch.
At present, in a new avatar, the Kwid continues to be a major crowd-puller. In the current financial year (between April to October 2019), the French carmaker sold 28,102 units of the Kwid. While this may seem trivial in front of India’s largest selling entry-level hatchback, Maruti Alto, with over 1.12 lakh units sold in the same period, the Kwid gave Indians the first taste of luxury.
Inspired from the Kwid’s success, this year, Maruti Suzuki launched its own take in the form of the SPresso. While the initial two months saw Maruti register 15,640 units, the car is yet to prove its mettle. However, if Maruti’s past performance is taken into account, the SPresso is well on its way to becoming one of the largest sellers in the segment.
2019’s biggest success story
With the Indian automotive market going through one of its worst slowdowns, the year 2019 has seen two of the market’s biggest success stories in the form of the Kia Seltos and MG Hector (26,576 unit of the Seltos and 9,670 units of the Hector sold).
Both the SUVs offers Indian consumers with a pretty long features list, powerful engine options, and attractive price tags, making them a unique example of India’s love for SUVs
The road ahead
India’s SUV love is all set to be further boosted by the launch of the country’s most affordable electric SUV, the Tata Nexon EV. Kia will be bringing in a new compact SUV while MG has the premium electric SUV ZS EV.
Further, Maruti will be finally launching the much-awaited petrol version of the Vitara Brezza. However, what remains to be seen is how BS-VI emission norms treat the market over the next year.
(Edited by Suman Singh)
