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SUVs rule the roads with 48.5% market share in May

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More than one out of every three passenger vehicles sold in the local market is now an SUV, as Indian consumers increasingly opt for sporty, multipurpose personal vehicles that they can drive to office every day and take on long family leisure trips.

Industry estimates put the number of SUVs sold in the first five months of this year at nearly half a million, compared with 707,000 units in the 12 months of 2020. This has raised the share of SUVs in India’s passenger vehicle sales to 35% from 29% last year. The segment’s share was as much as 48.5% in May, but industry insiders don’t see it as a true picture of the market as much of the country was in lockdown last month due to the second Covid wave.

While passenger vehicle sales picked up quickly after the nationwide lockdown last year, the gains were faster in the SUV segment, continuing the trend in shifting consumer preference towards these more spacious vehicles with higher ground clearance that are more comfortable in Indian conditions.
“India is at the cusp of an SUV revolution,” said Tarun Garg, director of sales and marketing at Hyundai Motor India. “The contribution of SUVs to overall PV (passenger vehicle) sales is only going to grow going ahead.”

At Hyundai, SUVs now account for 45% of total India sales compared with just 9% in 2015 and the manufacturer of the Creta and Venue SUVs expects this to increase as the market recovers from the disruptions caused by Covid.

The local unit of the Korean automaker has already received 4,000 bookings for the Alcazar SUV it launched on Friday. Alcazar, priced at Rs 16.30-19.99 lakh, is the fourth major SUV launch by automakers in India since January and the latest of a dozen planned for this year.

The mainstream passenger car segment, meanwhile, hasn’t seen any major launch this year, indicating the changing focus of the automakers as well to the SUV space.

Hyundai is the SUV market leader in India. It had a share of more than 23% during January-May 2021.

At Maruti Suzuki — which also has multipurpose vehicles in its portfolio and dominates the overall utility vehicle market in the country — the market share of the entry SUV Vitara Brezza has increased 2.9 percentage points in April-May 2021, said executive director Shashank Srivastava.

A higher number of product offerings, competitive pricing and better fuel efficiency have been fuelling the demand for utility vehicles, he said, adding that the number of models in the entry SUV segment had increased to 15 now from just two in fiscal 2012.

“There are more choices for the customer, especially in the entry SUV segment at aggressive prices,” Srivastava said.

In the luxury segment, Mercedes-Benz has seen a sharp spike in sales of SUVs. The company has sold out the 50 units of the GLS-Maybach allocated for India this year and has started taking orders for next year.

“In the luxury segment, personal use always remained the primary reason for vehicle purchase and more customers prefer travelling intercities in their SUVs together with their families for comfort and security reasons,” said Martin Schwenk, managing director at Mercedes-Benz India.

VG Ramakrishnan, managing partner at consultancy firm Avanteum Partners, said the share of SUVs in PV sales had been on the rise, and the pandemic had only quickened it.

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