Rising aspiration: Makers bet big on subcompact SUVs, the new youth favourite

Currently, there are seven subcompact SUV models (Kia Sonet, Honda WR-V, Hyundai Venue, Mahindra XUV300, Maruti Suzuki Vitara Brezza, Ford EcoSport and Tata Nexon), and two more will be launched soon

By:Updated: Aug 09, 2020 10:58 AM
kia sonet Kia Sonet subcompact SUV made its global debut in India on 7 August

With Kia unveiling the Sonet on Friday, almost every major carmaker now has a subcompact SUV(under4 metres in length) offering for the Indian customer. In the mass market segment, currently, there are seven subcompact SUV models (Kia Sonet, Honda WR-V, Hyundai Venue, Mahindra XUV300, Maruti Suzuki Vitara Brezza, Ford EcoSport and Tata Nexon), and two more will be launched soon—Toyota Urban Cross in the festive season, and Nissan Magnite early next year.

Subcompact SUVs, it appears, are the new hatchback/entry-level sedan.“The post-COVID-19 demand return in the new-car market is happening mostly in SUVs,” says Gaurav Vangaal, associate director, IHSMarkit.

During April-June 2020, six Hyundai hatchback/entry-level sedan models (Elite i20, Grand i10, Grand i10 NIOS, Santro, Aura and Xcent) together sold 10,942 units, but its Venue subcompact SUV alone sold 5,371 units.

Similarly, five Tata hatchbacks/entry-level sedans (Altroz, Bolt, Tiago, Tigor and Zest) together sold 10,094 units in the same period but its Nexon subcompact SUV alone did 3,663.

Honda’s subcompact SUV, the WR-V (772 units), outsold both the Amaze sedan and the Jazz hatchback put together
(279 units).

Automotive experts say that amongst all car body types, the SUV is the most practical as a people carrier – as compared to a similarly-sized sedan or a hatchback, it has more cabin space, is highly customisable, and egress and ingress is easier.

Rajeev Singh, partner & leader, automotive, Deloitte India, says the ongoing shift to subcompact SUVs is also because the seen joy higher resale value compared to a hatchback or an entry-level sedan. He adds that a large number of used cars go to smaller towns where people are now preferring SUVs—due to their higher ground clearance — as these regions may not have as good a road infrastructure as in urban areas.

“This leads to more demand in the aftermarket, and thus higher resale value of a new SUV,” he says.

Som Kapoor, partner, automotive sector, EYIndia, agrees. “SUVs, in general, have comparatively more space, better comfort, better driving experience, and maneuverability,” he says. “Initially, hatchbacks were the first car for most Indian buyers, followed by entry-level sedans, and now subcompact SUVs are taking that place.”

In urban markets in particular, Kapoor says the average car-buying age is coming down, and younger buyers, in general, prefer good driving dynamics and customisation over traditional features such as fuel efficiency. “This is not to suggest that SUVs are comparatively poor on fuel efficiency.”

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