In a market, which has traditionally been dominated by small cars, auto majors such as Mahindra & Mahindra (M&M), General Motors (GM) and Nissan have lined up a range of utility vehicles (UVs) for launch to cash in on the demand spurt during the festival season.
While half a dozen UVs are scheduled to hit the roads over the next few months, only two small cars — one each from Maruti Suzuki (new Alto 800) and GM (Chevrolet Sail) will debut in the current financial year.
While a compact SUV from M&M Quanto will burn rubber on September 20, Nissan Evalia will follow later this month. Also on cards are Chevrolet Enjoy, Ssangyong Rexton, Tata Safari Storme and Ford EcoSport.
Pawan Goenka, president (automotive and farm equipment sectors), M&M explains, “There are only two segments which are growing, utility vehicles and the 2-5.-5 tonne pick-up category. The UV segment has grown by around 60 per cent year-to-date, indicating a shift from passenger cars which is more in line with consumer preference in developed markets.”
Between April and August, sales of UVs have grown by a whopping 57.03 per cent to 207,651 units. These account for nearly 20 per cent of the passenger vehicle market, up from 13.5 per cent in the year-ago period.
Sales have been driven by Maruti Suzuki Ertiga, Toyota Innova and Renault Duster.
For the first time, sales of UVs have overtaken that of sedans which grew 15 per cent to 196,733 units. Sales of hatchbacks declined 3.36 per cent to 555,743 units.
“In developed markets, UVs account for a quarter of passenger vehicle sales. There is a lot of room for this section to grow sales in India. Earlier, there were only four odd players in the space. Now everybody is looking at introducing them in the Rs 6-10 lakh price bracket,” said Goenka.
To cash in on potential demand, M&M has scheduled the launch of compact SUV Quanto on September 20. The premium SUV Rexton from Ssangyong stable will follow before Diwali. Mahindra is expecting to sell about 1,500-2,000 units of the Quanto in the initial months.
Experts hold, the introduction of compact UVs at affordable price points has spurred growth in the segment. “There has been a shift in lifestyle of Indian consumers. People tend to drive out more often on weekends with families and friends. SUVs offer more seating capacity, are diesel driven and, therefore, more powerful and fuel-efficient. This segment has grown despite the sluggish market,” says an analyst of a Mumbai-based advisory firm. The passenger vehicle industry grew by a modest 7.42 per cent between April and August to 1,049,961 units.
The demand in the category is such that Renault has commenced a third shift and doubled production capacity for the Duster to 7,000 units per month.
“We are doubling production capacity of the Duster. It offers all the features and comforts available in a sedan, and has the styling and space of a SUV. It is a segment breaker and we expect to draw customers both in the SUV space and also from among looking at buying a premium hatchback or sedan,” said Marc Nassif, managing director, Renault India. The company has registered over 15,000 bookings for the vehicle.