Micro SUVs are gaining traction in India, turning into a vivid spot for the home automobile trade battling a gross sales slowdown this yr. The push for such small SUVs underscores a broader shift in direction of SUVs from conventional vehicles on the earth’s third-largest car market.
Gross sales of small SUVs akin to Hyundai Motor India’s Exter and Tata Motors’ Punch, priced as much as INR 10 lakh, are scorching the gross sales charts, rising 72% within the first 4 months of this fiscal, outpacing a 1.8% enhance in home passenger car gross sales.
As many as 175,330 small SUVs had been offered between April and July 2024, up from 101,855 items in the identical interval final yr, confirmed knowledge from automotive consultancy agency Jato Dynamics. In reality, incremental gross sales of 73,475 items of those SUVs greater than made up for a decline in gross sales totalling 69,936 items of small vehicles/hatchbacks in the identical interval.
Gross sales of small SUVs embody these of Tata Punch and Hyundai Exter, and to a smaller extent, volumes of entry variants of compact fashions like Maruti Suzuki Brezza, Hyundai Venue and Tata Nexon.
Others are additionally becoming a member of this fast-growing phase.
Kia Motors is seeking to launch Clavia, its first micro SUV mannequin, whereas Hyundai is engaged on the Bayon compact SUV, which might be competing with Maruti Suzuki’s common Fronx mannequin.
Volkswagen Group’s Skoda, too, is about to introduce Kylaq, its first compact SUV, early subsequent yr.
The strong progress in small SUV gross sales has ballooned their share in automobiles priced as much as INR 10 lakh by 11% throughout April-July 2024. This was on the expense of hatchbacks whose gross sales continued to slip, falling by 17% in the course of the interval.
Senior trade executives say numerous causes are behind the shift.
Micro SUV gross sales up 86% until August in CY24
The rising aspirations of rural consumers and availability of inexpensive SUVs within the entry-level phase which might be thought of extra versatile and spacious than hatchbacks and entry sedans are driving demand for small SUVs within the Indian market, the executives informed ET.
“Micro SUVs have emerged because the quickest rising phase this yr. On the similar worth factors as hatchbacks, prospects now have the selection of automobiles with SUV body-style just like the Exter, which has 6 airbags as customary, sunroof and dashcam as phase first options. And they’re preferring the latter for the flexibility in utilization {that a} SUV presents,” stated Tarun Garg, entire time director and chief working officer at Hyundai, the nation’s second largest carmaker. Hyundai launched the Exter in July 2023.
Rising micro SUV gross sales have boosted their share in complete SUV phase gross sales to 13% between January and August 2024, up from 9.8% in CY2023. “The pattern is especially fascinating provided that there are solely two fashions within the phase — Hyundai Exter and Tata Punch. The potential has made even the market chief look into the phase,” a senior trade government stated requesting anonymity.
Maruti Suzuki has began growing a micro SUV–positioned beneath its best-selling compact SUV Brezza–to tackle Tata Punch and Hyundai Exter, folks stated. The car is prone to go on sale in two years.
“Consumers immediately are aspirational, they need revolutionary and feature-rich merchandise regardless of the value level, be it sub-Rs 10 lakh or above; they’re prepared to pay for the automobile in the event that they see worth in it,” stated Garg.
Even on the broader base of the primary eight months of 2024, micro SUV gross sales have surged 86%, in comparison with a 19% enhance in complete SUV phase gross sales.
Ravi Bhatia, president, Jato Dynamics, stated whereas most automobiles with a boxy body-style are loosely labelled as SUVs, there may be absolutely an growing shopper shift in direction of them, and away from small hatches and sedans. “Customers immediately choose spacious vehicles with greater seating positions. In case of hatches, the design itself limits the house obtainable inside the car. Whereas in sedans, the boot curtails the scale of the inside of the car. And provided that immediately each these physique kinds are available in the identical worth vary, there may be an affinity for the smaller SUVs amongst consumers,” Bhatia stated.