India Rides the SUV Way

India's obession with SUVs; pic credits:pinterest.com

SUVs are the preferred mode of transportation for multitude of Indians, whose numbers are increasing exponentially. Cars in the SUV category are getting enormously popular on the Indian roads and seem to be outnumbering sedans and hatchbacks. We take an explanatory look into the situation.

Indian population’s growing affection with the SUV segment of passenger cars is something which not very hidden. Each year, Indian consumers buy more and more SUVs, consequently have increased their market share to a considerable amount. As per a recent report by GadiWadi.com, the market share of SUVs in India comprises of more than 30%. It is significantly closer to the ‘small car’ or hatchback segment’s total market share, and more than the market share of sedans.

Indian PV Segment Market Share by vehicle type

Indian PV Segment Market Share by vehicle type

This new-found love for power and prestige has made the Sports Utility Vehicles (SUVs) assume a new meaning in India and visualize the segment’s growth potential. More than 6,00,000 SUVs (sourced Autocar India) across all segments were sold in India in FY2019 indicating that the UV craze is not going to die anytime soon in the country.

Market Size & Forecast to 2025

Market intelligence consultants, Goldstein Research, analyzes the India Compact SUV market is likely to boom as the demand for compact SUVs in India is on the rise. Compact SUVs segment has seen immense growth and customer conversion, and as a result almost all automakers are trying to comprehend it. Further, the market is anticipated to expand at a CAGR of 9.6% over the forecast period of 2017-2025, forecasted on the basis of revenue analysis, product benchmarking and strategic developments of key market players.

​Growing number of SUVs in India;pic credits:ibtimes.co.in

Growing number of SUVs in India;picture:ibtimes.co.in

How did the SUV market in India make its name?

SUV sales in India are not influenced by the traditional desire to go off-roading. Instead, it is a mix of numerous underlying factors that have sparked a new breed of SUV fanboys in India, according to Future Market Insights.

 

For a long time, there were only two SUVs that dominated the Indian market – Mahindra & Mahindra’s Scorpio and Tata Motor’s Safari. These two cars symbolized raw power and authority over the puny Indian roads and other cars that ran on them.

Mahindra Scorpio;pic credits:Indiamart.com

Mahindra Scorpio;picture:Indiamart.com

Tata Safari; pic credits:flickr.com

Tata Safari; picture:flickr.com

However, they became popular only with the select few as the volume-staggering Indian middle class shielded away from these heavyweights due to their lack of sophistication and elegance that many hatchbacks and sedans offered. As a result, in the absence of attractive products, sedans and hatchbacks remained the preferred choice for Indian car buyers.

The breaking point in the Indian SUV market came with the Renault Duster, a compact SUV originally made for European markets (badged Dacia Duster). A capable product, with appropriate features catering to Indian consumer’s needs and with an attractive price tag, the Duster was an instant hit among the people.

Renault Duster 2012 version;pic credits:cartrade.com

It was not marketed as a hardcore off-roading vehicle but positioned as a smarter buy than a sedan, offering more features and a strong presence on the road. Duster’s success dawned a new phase in the Indian SUV market, creating a solid path for many newcomers to make their name, such as the Ford EcoSport, the Hyundai Creta and the Kia Seltos.

As a result, a research conducted by YouGov at unveiled at ETAuto EV Conclave 2020 shows, around 46% of millennials are willing to buy SUVs over hatchbacks and sedans. Out of them, around 29% are willing to buy a large SUV, while 16 per cent are interested in buying a compact one.

​Automotive market division on basis of choice

Automotive market division on basis of choice

Renault Duster 2012 version;picture:cartrade.com

What’s Driving the SUV Frenzy in India?

 1. Big Boy Image

Most consumers in India that purchase an SUV have an image commitment to be catered. They like to be the center of attention on the road, as well, among the traffic full of cars of all shapes and sizes. Looking to stand out from the crowd, people choose these vehicles for the sense of power and authority that SUVs come with. It has become a style statement for many, expressing privilege and exerting dominance.

Big boy's SUVs;pic credits:indiacarnews.com

Big boy's SUVs;picture:indiacarnews.com

 2. High Ground Clearance

High ground clearance is one of the biggest reasons any people choose to opt for an SUV over a sedan or a hatchback. Roads infrastructure in India is not the greatest in the world, with uneven patches, no-standardized height of speed-breakers and potholes in common. Driving over such conditions, an SUV will not have issues with scraping its underside over bad road surfaces and provide a decent stable ride.

High ground clearance of SUVs;pic credits:mycarhelpline.com

High ground clearance of SUVs;picture:mycarhelpline.com

 3. Higher Driving Position

Another major factor determining volume sales is the high seating position of the driver. A commanding position on the road is something that helps with drivability and provides a sense of joy or excitement. People like to get a better view over and around the traffic they are stuck in, while enjoying the more ‘capable and powerful’ authority over the road.

High driving position in SUV;pic credits:autocarindia.com

High driving position in SUV;picture:autocarindia.com

 4. Go Anywhere Capability

Buyers often pick SUVs for their ‘go anywhere capability’ providing comfort and ease in driving around the toughest of the terrains. Although a majority of the SUVs bought in India are two-wheel drive variants, which do not really impart any off-roading capacity, there is a psychological satisfaction attached that any SUV would provide a better ride quality than its counterparts.

Off-roading capability of SUVs;pic credits:geek-tips.github.io

Off-roading capability of SUVs;pic credits:geek-tips.github.io

 5. Comfort and convenience

An SUV, in most cases, offers more space than a sedan and definitely greater than a hatchback making it much more comfortable. They are loaded with features that make the drive and the ride quality as convenient and comfortable as possible, while requiring the minimum outputs from the driver. Large SUVs can sit more people than conventional sedans or hatchbacks comfortably, which can house just 5. Also, a larger boot along with utility storage spaces around the cabin are inviting features for many.

Comfort & convenience features in a SUV;pic credits:eastsideskoda.com.au

Comfort & convenience features in a SUV;picture:eastsideskoda.com.au

 6. Family Quotient

Adding to the strong social and cultural quotient, space and durability are the other key factors driving SUV sales in India. Unlike in the west, most Indians live with their parents in ‘extended families’ or ‘joint families’. For millions of such households, a 7-seater SUV is a logical option. Also, when consumers have the option to get a stronger, more powerful SUV, the 7-seater vans and MPVs (Multi-Purpose Vehicles) loose out on their sales as well.

 

Although, a majority of the SUVs sold in India belong to the compact SUV category and can only seat 5 people. Nuclear family trends are growing in the country, yet constitute a small segment, and so are the people who live alone, mostly youngsters, for study or work purposes. Buying an SUV makes the most choice for them when they look for an all-in-one capable vehicle that can provide for all their needs, be it daily office runs or weekend getaways.

7-Seater SUV;pic credits:pinterest.com

7-Seater SUV;picture:pinterest.com

Versatile compact SUV;pic credits:bcmtouring.com

Versatile compact SUV;picture:bcmtouring.com

 7. Safer Vehicles 

An SUV is often seen as a safer vehicle, because of its size. Consumers, again, have a belief that a bigger car is necessarily a safer place to be in, which is not exactly true. Crash test results often show that a well-built sedan or hatchback is just as safe as an SUV.

All-around protection in an SUV;pic credits:practicalmotoring.com.au

All-around protection in an SUV;picture:practicalmotoring.com.au

 8. Market Dominated by Second-time Buyers

 

In India at the present age, only a small segment of consumers are left as first-time buyers. A majority of consumers can be considered as second-time buyers, which entitles them to spend a little extra then would have initially have, on more premium products than they would have earlier chosen. As a result, replacement demand is getting higher, largely coming from people looking to upgrade their existing cars, compact hatchback or sedan to a compact SUV or a mid-size SUV.

Second time buyers prefer SUVs;pic credits:autoretailpro.com

Second time buyers prefer SUVs;pic credits:autoretailpro.com

Future of SUV Market in India

The India SUV market is anticipated to grow exponentially in the immediate future at staggering growth rates.  As consumers take a shift from entry level cars to entry level SUVs, mid-size SUVs and finally to full size SUVs, sales are expected to remain healthy. The compact SUV market has already penetrated the premium hatchback market and the mid-size sedan market, leaving them exposed, which contribute to its growth.

According to the Society of Indian Automobile Manufacturers (SIAM), SUVs in India are expected to grow at a startling level in the next one decade, expanding the total market share to as much as 40% of India’s passenger vehicle market.

Carmakers around the world have experienced the Indian obsession with SUVs and are delivering to the soaring demand.

  • New carmakers entering the Indian automobile market, such as Kia Motors and MG Motor India, launched an SUV as their first products in the Indian market.

  • MG Motor India launched its second product in the country, as well, as an SUV, though electrified.

Kia Seltos;pic credits:indiatoday.in

Kia Seltos;picture:indiatoday.in

MG ZS EV;pic credits:drivespark.com

MG ZS EV;picture:drivespark.com

  • Homegrown companies such as Tata Motors and Mahindra & Mahindra have compiled a massive portfolio of vehicles, each consisting at least three SUV options in all price groups.

  • Even the small car favored manufacturer Maruti Suzuki analyzed the need of the era and has rolled out two generations of its compact SUV, Brezza, with multiple facelifts.

Tata & Mahindra SUV Lineup;pic credits:gaadiwaadi.com

Tata & Mahindra SUV Lineup;picture:gaadiwaadi.com

Best-selling Maruti Brezza'pic credits:autox.com

Best-selling Maruti Brezza;picture:autox.com

  • Ford EcoSport has been the constant winner in the sub 4-meter segment and received multiple accolades.

  • Hyundai launched the Venue in 2019, claiming it to be the perfect car for Indians on Indian roads for Indian purposes and to have made it while keeping in mind the specific Indian consumers and their needs. The car was a massive hit and recorded huge sales.

Ford EcoSport 2020;pic credits:cardekho.com

Ford EcoSport 2020;picture:cardekho.com

Hyundia Venue;pic credits:motorauthority.com

Hyundai Venue;picture:motorauthority.com

  • Hyundai Creta is the most popular mid-size SUV in the country and has sold over 200,000 units since its launch in 2015. The brand is still going strong with a new generation model just launched a few months back in early 2020.

  • Toyota Fortuner and Ford Endeavour are countries two best-selling full-size SUVs with competitive sales numbers.

Hyundai Creta;pic credits:thehindu.com

Hyundai Creta;picture:thehindu.com

Ford Endeavour and Toyota Fortuner lurking together;pic credits:motoringjunction.com

Ford Endeavour and Toyota Fortuner lurking together;picture:motoringjunction.com

  • New products have been launched in the scarce full-size SUV segment in the past few years, such as the Mahindra Alturas G4 and the Skoda Kodiaq, in a bid to encourage volume sales.

Mahindra Alturas G4;pic credits:carandbike.com

Mahindra Alturas G4;picture:carandbike.com

Skoda Kodiaq;pic credits:overdrive.in

Skoda Kodiaq;picture:overdrive.in

Competitive Market

The SUV market in India is highly competitive with the influx of loads of new vehicles. Manufacturers have observed the Indian demand for sports vehicles and are constantly launching new and innovative cars in this area. Be it the compact SUV segment, mid-size SUV or the premium SUV segment, consumers have a vast list of alternatives to choose from when it comes to SUVs.

Below given is a breakdown of the three segments of SUVs sold in India and the potential options available in each of the three SUV categories, along with their anticipated market share, based on the sales of February 2020 as per data from Auto Punditz.

​Indian automotive market divided by type of SUV

Indian automotive market divided by type of SUV

 

 1. Sub-4-Meter or Compact SUV Segment

The sub-four-meter SUV segment in India is probably the most popular in the country. It began gaining attention following the debut of the Ford EcoSport, while Maruti’s Brezza took the competition on a new level.  

​Compact SUV market share in India

Compact SUV market share in India

A major reason for the increased popularity of this segment was the cost. Indian government’s regulations allowed it to be cheaper to manufacture/assemble a car with overall length less than 4 meters. This gave the brands an opportunity to create a fresh new product, bigger and more muscular than a hatchback while more spacious than a sedan of the same size. All this, while the price of the car not getting ridiculously high.

 

The compact SUV segment took off with flying colors as soon as it struck the market and there has been no turning back ever since. As per a report by Auto Punditz, more than 28,000 compact SUVs were sold in February 2020.

Competition in the Segment

Compact SUV market share by unit sales in Feb'20

Compact SUV market share by unit sales in Feb'20

​Compact SUV options;pic credits:autocarindia.com

Compact SUV options;picture:autocarindia.com

 

 2. Mid-size SUV Segment

The mid-size SUV segment in the country is the second most prevalent after the sub-4-meter segment. Renault Duster initiated the demand for this segment, not just in India but probably globally, which has become a full-grown category among the most sold cars in the country. 

Mid-size SUV market share in India

Mid-size SUV market share in India

Consumers looking for a luxurious vehicle in the price range of Rs. 10-15 lakhs, who would earlier get an option of either a sedan or a ‘bouncy’ SUV, became the forefathers of this segment in the country.

 

They could now choose from a vast list of alternatives, all offering luxury as well as comfort, more space and better features than a regular similar specced sedan, with the addition of off-roading capability among other benefits. There really isn’t a better logical option, unless of course you are specifically looking for a sedan. The report from Auto Punditz show more than 20,000 units being sold in Feb’20.

 

Competition in the Segment

​Mid-size SUV market share by unit sales in Feb'20

Mid-size SUV market share by unit sales in Feb'20

​Mid-size SUV options;pic credits:evoindia.com

Mid-size SUV options;picture:evoindia.com

 

 3. Full-size SUV Segment

The full-size SUV segment in the country is not so rewarding but equally popular in India. The market is predominantly controlled by two rivals, with other competitors showing minimal market share. However, due to the size of the market and growth potential, even the lowest of share make sense and convert to high sales numbers.

​Full-size SUV market share in India

Full-size SUV market share in India

Full-size SUV options;pic credits:autocarindia.com

Full-size SUV options;picture:autocarindia.com

The premium large SUVs are majorly bought either for 7-seater capacity or sheer luxury factor. They offer a colossal number of features and space, a gigantic road presence and justify their cost quite satisfactorily. Auto Punditz reports sale of just over 2,000 units in Feb’20.

 

Competition in the Segment

 

​Full-size SUV market share by unit sales in Feb'20

Full-size SUV market share by unit sales in Feb'20

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Autography created by Dhruv Aggarwal

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Hyundia Venue;pic credits:motorauthority.com