India’s automotive industry records growing demand for SUVs

The automotive industry is cashing on the passion and demand for SUVs across the country – with more than half the passenger vehicles sold in September, particularly the July-September quarter, were SUVs. This highlights the demand and craze for SUVs, which are available across price points and bands.

There has been a noted growth. Earlier, the spread of COVID-19 had affected the sales of luxury cars. A number of automobile manufacturers were forced to temporarily shut their production as the supply chain was disrupted by the country-wide lockdown imposed by the central government in 2020.

India is a huge market for vehicles and poses a very high potential for luxury cars, and this can be seen in the growing demand and sales of SUVs. The demand for luxury SUVs has been growing rapidly in the country and is expected to continue during the forecast period, as they offer extra space and comfort.

Data from SIAM, the industry lobby group, as per ToI shows that with sales of 87,720 units in September 2021, SUVs outnumbered the passenger cars category, which comprises of hatchbacks and sedans also, by a large distance as the latter could only sell 64,235 units in the same month. This trend was equally strong during the second quarter of 2021-22, wherein SUVs sold 3,67,457 units while passenger cars added up to 3,43,939 units.

Ravi Bhatia, executive, JATO, told ToI that it’s the overall packaging that matters the most. “SUVs give you the best value for money when it comes to style quotient, visibility, power and cabin space. The provide command and control on the road.” Shashank Srivastava, director (marketing & sales), Maruti Suzuki, pointed out that this trend is not just for India, but observed globally. “The trend is across the world. If you look at markets such as China, the US and countries in Latin America and Europe, the share of SUVs is around 45-50% to overall sales. India has been a late starter, but has been gaining swiftly.”

Industry experts believe the fall in prices of SUVs over the past few years and the broadening road and highway network across are pushing demand for the vehicles that have better ground clearance and relatively modern and robust design cues. This can be seen in the prices of mini SUVs, with the likes of Nissan Magnite and Renault Kiger which begin at just under Rs 6 lakh, while the sub-Rs 10 lakh category has strong models such as Kia Sonet, Tata Nexon, Maruti Brezza and Hyundai Venue etc.

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And then there are the popular models such as Hyundai’s Creta, Mahindra Thar, Kia Seltos and MG Hector. Despite the sharp upward price, demand remains equally strong for luxury off-roaders from European carmakers such as BMW, Land Rover, Mercedes-Benz and Audi. The Indian market has also recorded a strong pull for Porsche and Lamborghinis.

In order to meet the growing demand, international car manufacturers like Mercedes-Benz, Volvo, Audi and BMW are launching new models every year. BMW’s locally-assembled SUV range contributed over 50% to its overall sales, with strong demand from X1 and X3 variants; in March 2020, BMW launched an updated version of BMW X1 with a BS-VI engine at a price between Rs 35,9-42.9 lakh.