Autos step on SUV gas to flourish

trend watch!

Autos step on SUV gas to flourish
The craze for the compact SUV (Sports Utility Vehicle) in India is boosting the four-wheeler market.

New launches like Hyundai’s Creta and Mahindra’s forthcoming launch of the SUV TUV300, and Land Rover’s new Discovery Sport, which will be launched in September this year, indicate the growth potential of this market.

In the first week of August this year, India’s high selling compact SUV Ford EcoSport achieved the two lakh sales milestone within two years of its launch.

Of the total sales, including exports, 1.12 lakh came from the domestic market.  
Land Rover recently announced its first new member of the Discovery family, the  Discovery Sport. In a release, Rohit Suri, president, Jaguar Land Rover India (JLRIL), said:  “The new Discovery sport is a premium SUV especially designed to invoke the adventure gene in our customers. It is a perfect vehicle for people with an unstoppable spirit and passion to explore and discover.”

“Earlier, we had Ambassador that was able to carry the whole family, and it was replaced by Maruti 800. Now you are slowly witnessing SUVs capturing that particular space as the whole family can make use of it. Also, if you take Indian roads, they are poor in quality and we need a vehicle that could carry the whole family as well as manage on our roads,” says Sugato Sen, deputy director general of Society of Indian Automobile Manufacturers (SIAM).

The Mercedes-AMG range includes powerful SUVs. The company’s SUV range comprises the AMG G 63, the AMG GL 63, the AMG ML 63, and the AMG GLA 45. Renault India offers the luxury SUV Koleons and also recently launched MPV, Lodgy.

Apt for Indian roads

Swedish luxury car maker Volvo  offers XC60, a technologically advanced compact luxury SUV, said to be apt for Indian roads. The all-new XC90 is a seven-seater.

Mahindra & Mahindra will launch its new compact SUV on September 10 from its Chakan plant in Maharashtra. Speaking recently to reporters, Pawan Goenka, Executive Director, M&M, had said that Mahindra has the strongest equity in the SUV segment in India. “In our ongoing automotive journey, we identified a need for a tough, bold and masculine SUV and our customer clinics have confirmed that the TUV300 (new SUV) delivers on these parameters,” he said.

A compact sub-four metre SUV,  Mahindra is positioning the TUV300 as a ‘a true blue SUV’.
The company is targeting to address needs of those customers who are looking for a pure SUV in the compact segment.

Mahindra’s iconic SUV, Scorpio, in May this year crossed  the 50,000 sales mark for the fourth consecutive year. A proven true-blue SUV, the Scorpio is the second-largest selling SUV in Mahindra’s stable, after the Bolero.

Crossovers and MPVs

In its annual report 2014/15, K Ayukawa, MD and CEO of Maruti Suzuki, talks about Maruti’s latest launch S-Cross.  “The S-Cross creates a new market segment which combines the comfort and luxury of a sedan with the power and styling of an SUV. Sometime in the future, we will launch a compact SUV which will raise our presence in the UV segment by a quantum leap.”

If you look at the automobile market, SUV is an important segment, says industry expert and Price Waterhouse partner Abdul Majeed J Shaikh. “For the last two-to-three years, SUV sales have been growing, especially from the rural pockets. People are now gradually shifting to SUVs.

Earlier, people had small cars and then graduated to SUVs. But now they are directly buying the sports utility vehicle,” he said. If you take the MPV (multi-purpose vehicle), it’s mostly used for commercial purposes.

Though not to the extent it does in the US and Europe, the SUV market share in India is expanding. According to SIAM (Society of Indian Automobile Manufacturers) data, the broader Utility Vehicle space — which includes SUVs, MPVs, etc. — saw sales of 2,17,101 in the April–June 2015 quarter, giving it a 19.4 per cent share of the larger passenger vehicle market of 1,118,127.

Majeed says the SUV market in India is different from other countries. “Here people avail loan facility to purchase a car. If you take America and the European countries, SUV there is different — they are huge — and here we have the compact version,” he says.

“When people step into showrooms, they look for variety. If any particular company doesn’t have the variety, they lose customers. So companies are coming up with SUV launches,” adds the industry expert.


SUVs are big in US, Europe


It’s not just in India, sports utility vehicles (SUVs) have a major influence in Europe and the United States. In the ten-year period between 2005 and 2015, the market share of SUVs in Europe went up from a paltry five per cent to 22 per cent at present, according to industry tracking firm IHS Automotive.

Interestingly, the growth seems to have occurred at the expense of the sedan, whose share in the market dwindled from 11 per cent to five per cent during the same period. Some analysts expect the SUVs to conquer a third of the European market by 2020.

Across the Atlantic, the SUV market share in the US was a humongous 35 per cent as of December last year, according to WardsAuto Infobank.

While smaller SUVs have been doing well in the US market for the past three years, larger SUV sales have taken off after fuel prices collapsed this year. Last year, SUV sales in the US market grew 12 per cent to 5.5 million cars.

Analysts note that the growth was at double the speed of the automobile industry as a whole. There’s no doubt that gas prices have an influence over the sales of SUVs in developed markets, and their sales — especially those of the bigger versions — take off when gasoline prices drop drastically.

But in India, where fuel prices are not yet fully market-determined, the proliferation of SUVs seems to driven by different dynamics.

SUVs are also not without their downsides. Estimates from Europe show that on average, an SUV emits about 35 per cent more CO2 per kilometre than a hatchback or saloon.


SUV SQUARE-OFF

Indian customers need a vehicle that can carry the whole family
Instead of buying small cars first, people are now directly buying SUVs in India
Also, every company wants to have an SUV to add variety to its portfolio
UV market in India had a 19.4% market share in the April–June 2015, first quarter

Sedan models have seen their market share in Europe dwindle from 11% in 2005 to 5% in 2015
During the same period, the share of SUVs went up from 5% to 22% and is expected to hit 33% by 2020
SUV market share in the US is 35% as of December last year
Last year, SUV sales in the US rose 12% more to 5.5 million



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