Flattish so far, market for three-row, seven-seater SUVs heats up

With prices starting from Rs 899,000, Kia launches the Carens

The market for three-row SUVs that have been gaining traction among the SUV buyers in India is set to hot up further as more passenger vehicle makers stake their claim in the small but fast expanding segment with their offerings.

On Tuesday, Kia Motors India announced its entry into the segment with the Carens, its seven-seater offering that will compete with the Suzuki XL6, Hyundai Alcazar, among other models. Priced competitively at Rs 8,99,000 onwards going up to Rs16, 99,000, with its latest model, the local arm of the Korean carmaker is looking to attract buyers who are looking for an affordable yet a premium SUV.

Suzuki and Toyota’s CMPV models, which will sell under both Suzuki and Toyota badging, are also expected to break cover. Last week, Jeep India announced that it will be launching the Meridian, a seven-seater sibling of the brand's popular offering Compass in India.’

Why the fixation with seven seats and three rows? “The demand was there, but there wasn't that much of a choice and the cars which were available in six and seven-seat options were more functional. It was not taking care of the aspirational needs of the consumers, which is what we have tried to do with the Carens,” said Hardeep Singh Brar, senior vice president and head of marketing and sales at Kia Motors India.

The overall market (including mass and luxury models) for the seven seater SUVs have seen a moderate growth year-on-year, according to JATO Dynamics. It ended the year with 193,619 units (January to November) in calendar year 2021 from 119,524 units in 2020.

“Although the market has almost been flat there is a case for personal family transportation given joint families in India. The low-cost modular platform has helped them price the model competitively,” said Ravi Bhatia, president and director at JATO Dynamics. The ongoing semiconductor shortage can lead to delay in deliveries and waiting periods may stretch up to six months unless the third shift of production begins, said Bhatia.

The Hyundai affiliate is betting big on the Carens and envisages selling 50,000 units in the first full year of its launch. Brar estimates the segment size in which the model is positioned to be around 360,000 units per annum, accounting for 12-13 per cent of the overall SUV market. It has got a booking of close to 19,000 units since Kia commenced bookings for the model on 14 January.

“It’s a very important model for Kia and the competitive pricing could make it yet another volume spinner,” said Puneet Gupta, director I.H.S Markit-a sales forecast, market research firm.

The well thought, differentiated price positioning will ensure that the cannibalisation with Hyundai Alcazar is minimal. The target audience for the Hyundai Alcazar and Carens do not overlap. While those looking for an affordable seven-seater can opt for the Carens, Alcazar can be an option for those willing to fork out more. The price of Alcazar’s base model starts from Rs16,34,000 (ex-showroom)