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Sub-compact SUVs in top gear

Shifting Preferences
Last Updated 01 December 2020, 08:24 IST

Attribute it to the Covid-19 pandemic, general market trend or any other factor, the current buzz in the Indian automotive industry is the sub-compact SUV segment.

The customer is spoilt for choice these days with options like Maruti Suzuki’s Vitara Brezza, Hyundai Venue, Tata Nexon, Ford EcoSport, Kia Sonet and others. More models are expected and this bodes good for the struggling sector.

There are a few reasons compact SUVs are selling well. “There is a high driving stance and you feel safer on the road. Generally, SUVs have large ground clearances and in India, this is a benefit especially when you are driving in areas where the roads are not always good,” explained Shashank Srivastava, Executive Director, Marketing and Sales, Maruti Suzuki India.

“The third advantage with entry SUVs is good fuel efficiency. They are also more manoeuvrable, even in city conditions. These sub-four metre SUVs are in a lower tax bracket. A combination of factors has made the entry SUV quite popular. It is similar to the trend we have observed earlier in hatchbacks, sedans and other passenger vehicles,” he added.

Maruti Suzuki launched the new Vitara Brezza in February, this time only in the petrol variant. “We have had very good response for the Brezza. We are selling something like seven to eight thousands of them per month. And in the petrol SUV segment, we have around 45% market share,” he said.

Maruti Suzuki’s tilt to petrol cars has been made pretty clear and there is good reason for it. “The contribution of petrol cars in the compact SUV segment is also increasing. In fact, 75% of sales in this segment are petrol cars. The diesel share has come down to about 18% or so in the total passenger vehicle industry,” Srivastava noted.

“At that time, SUVs had a larger share in diesel. This year, especially in the entry SUV segment, we have seen that the diesel share has fallen dramatically,” he added.

The company’s CNG products have also been seeing good growth. “Last year, the market fell by 80-90% overall, but in CNG, we had good growth of almost 7-8%. This year also, we have projected production of 140,000 to 155,000 CNG vehicles and this is pretty large considering we did 107,000 last year,” Srivastava stated.

The company, just like others, saw zero production and sales in April due to the nationwide lockdown. However, once production and sales resumed, Maruti Suzuki has seen numbers going up steadily. “There has been a good recovery and numbers are increasing. From July onwards, the supply chain that was disrupted was also fixed and production sort of became normal in August. Also, the bounce back has been better in the rural areas as compared to the urban areas,” said Srivastava.

The Covid-19 pandemic has undoubtedly increased the demand for personal mobility as people are wary of using public transport for obvious reasons. “It is affecting the overall demand for cars, not just SUVs. That is also reflected in the increased demand for hatches. Covid-19 has had the effect that people are moving away from public transport. That is an overall effect in the industry,” he said.

The pandemic has also seen good movement in the used car market. With incomes reduced, the customer tends to spend less and go in for a used car. However, Maruti Suzuki’s True Value faces a unique problem. “We have seen very big inquiry levels and demand for used cars. But the problem is it is not reflected so much in sales,” he explained.

“The reason is that people are holding on to their cars. The demand for used cars is high but supply is not there. That is also probably a Covid-19 phenomenon. Normally, people sell their cars and buy a bigger or better one. That is probably coming down after Covid-19 and the number of old vehicles in the market is less,” he said.

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(Published 27 September 2020, 16:42 IST)

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