Compact SUVs set to be FY16 flavour as leading PV makers to enter segment

In the last two years, the year to date sale of Ford Ecosport is 48,000 units while Renault sold 35,000 units of Duster in the domestic market

By: | Updated: March 21, 2016 12:32 PM

Compact SUV, SUV sale, SUV India, SUV sale in FY15

Almost all passenger vehicle manufacturers are getting into this segment to shore up their overall volumes.

Over the last two years, the compact SUV (sports utility vehicle) segment has gained prominence in the domestic automobile sector, thanks to the success of two products — Renault Duster and Ford Ecosport. According to analysts, the year to date sales of Ford Ecosport is 48,000 while Renault sold 35,000 Dusters in the domestic market in the period.

Almost all passenger vehicle manufacturers are getting into this segment to shore up their overall volumes.

After the success of Renault Duster and Ford Ecosport, market share of Mahindra and Mahindra (M&M) — the biggest manufacturer of utility vehicles — has come down to 40%, from 55%, in the segment.

Companies like M&M, Maruti Suzuki, Honda, Hyundai and Tata Motors are expected to launch their respective products in the compact SUV segment in the second half of 2015 to early 2016.

Amit Kaushik, senior analyst at IHS automotive, said that people prefer compact SUVs over sedans because of style, overall convenience and comfortable pricing.

“The compact SUVs are developed as independent products by the companies, not as a conversion or extension of an existing product. It is offered at a very good pricing point and provides a different body style to the customers,” added Kaushik.

M&M is developing a compact SUV — S101 — which is scheduled to be launched in the second part of this year or early 2016. The company is also trying to stage a recovery in the segment by launching compact SUV Sangyong’s Korando this year. The Korando C is expected to be pitted against the Renault Duster.

According to sources, M&M is trying to localise the Korando production so that the company can price it competitively.

Maruti Suzuki, the country’s largest car manufacturer, is also known to be developing a compact SUV named XA ALPHA, or SX4 cross, which is expected to hit the market this year. Japanese car maker Honda is working on a compact SUV for the India market on the existing BRIO platform. It is going to be Honda’s fourth product from the platform after the Brio (Hatchback), Mobilio and Amaze.

Tata Motors — the country’s largest vehicle manufacturer by revenues — is also known to be developing a compact SUV Nexon with the Land Rover which is expected to come by 2017.

“By early 2017, we will have products from Honda in this segment. In the next couple of months, we will have Hyundai with the IX25, and in another 4-5 months, we will have the XA Alpha compact SUV from Maruti Suzuki,” said an analyst who did not wish to identified.

Ajay Srinivasan, director, Crisil Research, said that in the last 3-4years, the compact SUV segment has grown 30-40% compared to the 15% growth of the overall UV market. “I think, this segment will continue to grow by 15% in terms of volumes on the growth in the urban markets.

Pricing and packaging will be extremely important,” added Srinivasan

Analysts say that the companies are going to price their products between R6 lakh to R9 lakh. Petrol engine models are expected to start at R6-6.5 lakh and diesel variants at R7lakh.

A significant part of sedan market customers have shifted to compact SUVs in the last one year and with all major PV makers trying to enter the segment, one can say that compact SUVs will be the flavour in FY16.

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