Sales of utility vehicles, which comprise sports utility vehicles and multi-utility vehicles, overtook the combined sales of sedans and hatchbacks during the April-January period at 1.6 million units, as per Society of Indian Automobile Manufacturers data. Sales of sedans and hatchbacks during this period stood at 1.4 million units.
During the same period last fiscal, UVs trailed hatchbacks and sedans by 3,490 units — 1.1 million UVs were sold in that period, marginally less than sedans and hatchbacks at 1.2 million units. Auto analysts say the UV push is happening largely due to the rising sales of sub-4 metre SUVs, which have grown 39% from 576,579 units in April-January FY22 to 799,133 units in April-January FY23.
Som Kapoor, EY India Automotive, Future of Mobility leader (consulting), and partner, said initially hatchbacks were the first car for most Indian buyers.
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Hatchbacks were followed by sub-4 metre sedans, and now sub-4 metre SUVs are taking that place.
“In urban markets in particular, the average car-buying age is coming down, and younger buyers, in general, prefer good driving dynamics, customisation and a lot of technology features on the dashboard (some of which may not be available in entry-level hatchbacks), over traditional features such as good fuel efficiency,” he said. “These SUVs also have slightly higher ground clearance than sedans and hatchbacks, and buyers perceive these to be better suited for our road conditions.”
Kapoor added that UVs are also more suitable for large Indian families, plus the number of variants and models available in the last couple of years has given the buyer almost limitless choice.
Another analyst said new MUVs being launched in the market have pulled a lot of customers to the showrooms. “Last year was a bumper one for MUVs,” he said. “It started with Kia launching the Carens, which has sold over 70,000 units, at over 6,000 units per month. Then Maruti Suzuki drove in facelifts of the Ertiga and the XL6. This was followed by Toyota Innova HyCross. The MUV space had a lot of activity.”
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Saket Mehra, partner and auto sector leader at Grant Thornton Bharat, added that the market share of UVs has been steadily increasing over the last decade, owing to new launches at attractive price points, a GST differential that leads to increased sales of compact UVs (compact SUVs are taxed at a lower GST and cess than other UVs considering the lower cubic capacity of the vehicle), and changing consumer preferences. “As a result, recognising the huge potential in this segment, most passenger car OEMs are transitioning towards introducing new products or strengthening their UV portfolio.”