Most utility vehicles facing rough ride after launches of Creta, S-Cross

The entry of two new utility vehicles—Hyundai’s Creta and Maruti Suzuki’s S-Cross—is taking the fizz away from older vehicles such as the Ford EcoSport and Renault Duster.

Many of the utility vehicles were under pressure for the past few months and their sales took a deeper hit after the launch of the two products. A large chunk of utility vehicles are sold in the rural and semi-urban areas where demand has been weak this year due to unseasonal rains in March-April and a deficient monsoon.

According to the Society of Indian Automobile Manufacturers, the utility vehicles segment,

which includes sports, multi and premium utility vehicles, declined by 0.32 per cent in the April-July period of the current year.

The Creta was launched in the second half of July, while the S-Cross was launched in early August. In August, Hyundai sold 7,473 units of Creta, more than any other utility vehicle. There is a waiting period of three-four months on Creta and about 43,000 vehicles have been booked since the launch.

Creta was launched at an entry-level price of Rs 8.59 lakh (ex-showroom, Delhi) for the petrol version and Rs 9.46 lakh for the diesel version.

Seeing the high interest in the Creta, Hyundai has decided to ramp up the capacity of the vehicle to 6,500 units a month against its earlier plan of 5,000 units.  

The utility vehicle market was lacking excitement and many buyers were waiting in anticipation of new products. With the launch of new products, especially the high volume delivered by Creta, the segment decline is being arrested. The new products are pulling customers from sedan and premium hatchbacks as well as from other utility vehicles,” said Rakesh Srivastava, senior vice-president and division head, sales and marketing, at Hyundai Motor India.

Maruti sold about 4,500 units of S-Cross in August and has bookings of about 11,000 units. Interestingly, sales of Maruti’s own utility vehicle Ertiga also declined 33 per cent in August. S-Cross also has a waiting period of close to two months. The

S-Cross, available only in diesel variant, was launched at an entry-level price of Rs 8.34 lakh.

“The utility vehicles’ segment declined in August in spite of two new products that were launched recently. The industry is facing a low conversion ratio across many segments, including utility vehicles and most customers appear to be postponing purchases of vehicles” said Mayank Pareek, president of the passenger vehicle business unit at Tata Motors.

The utility vehicle portfolio of the company, which comprises vehicles such as Safari, Aria and Sumo, declined by 50 per cent in August.