Maruti Suzuki will launch a seven-seater SUV and also introduce the newest version of its smallest car, Alto.
By Pritish Raj
Car buyers can look forward to more than a dozen new models next year, mostly in the compact sports utility vehicles (SUVs) and high-end SUV segments. Together with upgrades, the number of launches could be close to 20.
However, given that the new range will be fitted with BS-VI engines, the models aren’t going to be cheap. But industry watchers say consumer preferences are shifting towards bigger and safer cars so they expect manufacturers to bet on UVs.
Maruti Suzuki will launch a seven-seater SUV and also introduce the newest version of its smallest car, Alto. In addition, it will roll out a petrol variant of the compact SUV, Vitara Brezza. Having tasted spectacular success with Nexon and Harrier, Tata Motors will launch a micro SUV and a compact UV, according to people in the know. The Mumbai-based automaker is also working on building a compact sedan along with a hatchback, Altroz, which could also be introduced by the end of 2019. French carmaker Renault is planning to launch a compact SUV and a compact sedan.
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The petrol variants of models that are similar to the Maruti Alto or the Tata Tiago are tipped to be costlier by anywhere between Rs 20,000 and Rs 25,000. Prices of the diesel variants of models of similar sizes are likely to go up by Rs 70,000-Rs 90,000.
For models with a higher engine capacity — a compact or a high-end SUV — the increase in the prices of petrol variants will be between Rs 40,000 and Rs 50,000. The BS-VI diesel variants of SUVs are likely to be costlier by Rs 1 lakh-Rs 1.5 lakh.
Mahindra & Mahindra (M&M) and Ford India will launch a c-segment SUV while Hyundai will be launching the new variant of its compact hatchback, i20. Newcomer MG Motor will launch a seven-seater SUV and an electric SUV MG ZS EV while Kia Motors will roll out its second UV, analysts tracking the sector at Nomura said.
According to analysts, the new launches may to some extent help stimulate demand as they have in the past. “New launches can increase footfalls at showrooms,” analysts at ICICI Securities said. For instance, three launches in 2019 by Hyundai Motor India and Mahindra & Mahindra (M&M) helped the companies combat the slowdown in demand to some extent. While most manufacturers reported a high double-digit decline in sales in the April-July period, Hyundai and M&M posted a 8% year-on-year and 5% y-o-y dip in volumes. “For FY20, we expect strong recovery in the UV segment, led by new launches and improving rural demand,” analysts at Nomura pointed out.
Even as car sales have been declining since July 2018, the demand for UVs during most months has been better than that for hatchbacks and sedans. In the April-July 2019 period, while passenger car sales fell 27% y-o-y, UV volumes fell only 7%. In February and March, when the passenger car sales fell 4.32% and 7%, respectively, volumes of UVs grew 4% and 2%, respectively.
Maruti Suzuki will continue to bet on the small car segment, where it has been dominant for three decades. Experts say with higher income levels and rising aspirations, first-time car buyers are skipping the entry car segment and moving to the next level.
Maruti Suzuki chairman RC Bhargava had earlier said the entry car segment will remain an important part of the portfolio. “There are millions of two-wheeler owners wanting to upgrade, so there will be a sizeable number of buyers at the entry level,” he said.
While carmakers are going all out to woo customers, sales of pre-owned cars are growing at 15-20% since they are available at roughly half the price of a new one; a five-year-old Swift can be had for less than Rs 3 lakh compared with Rs 6 lakh for a new one.
Estimates by CarDekho show that sales of used cars in FY19 were 4 million higher than new car sales of around 3.3 million units. The presence of organised channels, say experts, is making both buyers and financiers more comfortable.