SUVs beat other body styles to become fastest growing segment

Favoured for their high seating position, extra body room, luggage space and better resale value compact SUVs have become the most sought-after segment for manufacturers. The Kia Sonet has remained the top-selling compact SUV in India since launch three months ago followed by the Hyundai Venue. The former leader of the segment, Maruti Suzuki Vitara Brezza, has now slipped to the third spot.

Indeed, fuelled by new launches, stylish looking compact sports utility vehicles (SUV) became the second most favoured choice of body style for the third consecutive month in November paving the way for heightened competition next year.

The segment overtook compact sedan sales last year for the first time ever and since September has continuously clocked more sales than premium hatchbacks.

As of the end of November, compact SUVs controlled 15.5 percent of the passenger vehicle market, up from 11.46 percent at the end of August. Compact hatchbacks such as the Maruti Swift, Hyundai Grand i10 Nios and Tata Tiago remained the largest segment with a share of nearly 23 percent.

Apart from the Kia Sonet, the Mahindra Thar, Toyota Urban Cruiser and Nissan Magnite were some of the other compact SUVs that were commercially launched this year. Tata Nexon, Ford EcoSport and Mahindra XUV300 are some of the other models in the segment. Several of the recently-launched SUVs are armed with new, interactive and tech-powered features.

Renault Kiger, along with a compact SUV from Honda and Tata HBX are among the upcoming compact SUVs.

Saviours in 2020

Mid-size SUVs and compact SUVs turned the demand tide in 2020, which was otherwise a forgettable year for the industry. The mid-size SUV segment comprises models such as Hyundai Creta, Kia Seltos, Mahindra Scorpio and Renault Duster, to name a few. This segment is the fourth-largest, clocking more sales than sedans.

At 20 percent, the utility vehicle segment logged the best growth among all segments between July and November, while the passenger car segment grew 10 percent, according to the Society of Indian Automobile Manufacturers.

“Consumers are looking for SUV body type vehicles, which is also due to plenty of launches in this segment. Even going forward we may see sedans losing their market share to SUVs and even premium hatchbacks will lose their share to entry SUV models,” said Puneet Gupta, an analyst with IHS Markit.

The strict lockdown from end March to May to control the spread of the coronavirus, delivered a knockout punch to the auto sector. With factories and dealerships shut overnight for weeks, vehicle manufacturers suffered their worst-ever quarter (April-June).

But the festive period brought cheer to the beleaguered industry. November recorded the best-ever retail sales for the industry while October broke all previous records in vehicle dispatches. Factories were running at peak capacity and most dealers had run out of stock during the 40-day festive period.