New entrants in the domestic car market plan to remain SUV players with no plans to launch products in the hatchback and sedan segments, a space largely dominated by Maruti Suzuki, followed by Hyundai Motor India. The ones who have already launched their maiden cars —Kia Motors and MG Motor —have hinted that while it is difficult to snatch a pie from the incumbents, the strategy to compete only in the SUV segment stems from the fact that consumer preference is slowly shifting to bigger cars. China’s Great Wall Motors (GWM) and Haima Automobile, which participated in the ongoing Auto Expo and plan to launch their first cars in 2021 and 2022, respectively, do not want to risk their presence in India by launching hatchbacks.
“SUVs anyway is our core strength we intend keep leveraging that. Moreover, it’s high time SUVs get the attention they deserve,” Hardeep Singh Brar, director of marketing and sales at GWM told FE. “The share of SUVs in the passenger vehicle space is estimated to touch 50% in the next few years, which means hatchbacks market will shrink,” Brar said. A representative of Haima Automobile said the competition in SUVs has just started while other segments seems to have reached at a point where there is little scope for anyone to make a space. “Haima’s strategy of SUVs in India is clear, at least in the short term after the first product is launched. If the market dynamics change in future, other segments can be explored,” the representative said on the sidelines of the auto expo 2020.
Better off-road presence, multiple options and sporty styling in SUVs has evidently pulled up customers from the hatchback and mid-size sedan segment in the last five years. To be sure, the yearly volumes of SUVs, the likes of which are Maruti’s Vitara Brezza, Hyundai’s Creta and Ford’s EcoSport have touched around 9.5 lakh units currently as against 5.8 lakh units in FY16, a growth of 64% over the last five years, albeit on a low base. On the other hand, passenger cars, largely comprising hatchbacks and compact sedans, have grown at around 7% in the last five years.
Lorenz Glaab, vice president, product management sub-division at Hyundai Motor Company – parent of Kia Motors – said: “We don’t want to play in every segment, we want to play in the right segment”. While sedans still is an option being explored by Kia Motors, hatchbacks are completely out of question.
Maruti Suzuki controls the hatchback segment with a market share of around 70%, followed by Hyundai Motor India’s over 15%. For over a decade, Maruti products Alto and Swift have been the undisputed leader.
