FADA says compact SUVs driving growth for PV segment, now contributes 50% of new four-wheeler sales

Earlier, the entry-level segment contributed to around 50% of the passenger vehicle sales but now it has gone down to 40%.

FADA says compact SUVs driving growth for PV segment, now contributes 50% of new four-wheeler sales

The Covid-19 pandemic has changed the dynamics of not only our daily lives but also the way people think and move. It comes as no surprise that the different automobile segments are seeing a mixed bag of demand.

For the Indian automotive industry, for the first quarter gone by in FY2023, the overall auto retail sales came at 48,32,955 units across two-, three-, four-wheelers, tractors and commercial vehicles. This translated to a growth of 64 per cent and 206 per cent over the same period in FY2022 and FY2021 respectively. But compared to Q1 FY2020, a pre-covid period, the sales were down 8 per cent.

The passenger vehicle segment is expected to report record sales this financial year, but what’s interesting to note is the fact that while there is a slowdown in sales of entry-level vehicles and OEMs cutting down on their product offering in the segment, the sales of premium vehicles and Compact SUV has been able to drive growth.

But for the two-wheeler segment, this has been a case of a concern, the sales of premium products have not been able to compensate for the slowdown in the entry-level (upto 125cc) scooters and motorcycle sales.

Vinkesh Gulati, President, FADA says that “The pandemic saw customer expectations improving and OEMs too introduced higher quality products. Earlier, the entry-level segment contributed to around 50% of the passenger vehicle sales but now it has gone down to 40%. On the other hand, what we have observed is that there is a growing demand for compact SUVs, which is in the range of Rs 8 lakh to Rs 15 lakh. That segment now contributes upto 50 per cent of the new passenger vehicle sales. We are seeing a major jump there.”

He further highlights that in the last three years, the segment has seen an influx of many new models and features, which were once just limited to the premium segment.

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