Due to shifting customer preference towards compact utility vehicles from sedans and hatchbacks, the utility vehicle segment is set to report double digit growth in the current fiscal first time since FY13.
Due to shifting customer preference towards compact utility vehicles from sedans and hatchbacks, the utility vehicle segment is set to report double digit growth in the current fiscal first time since FY13. Volumes in the segment grew by 52% to 5,53,662 units in FY13. In the first eleven months of the current fiscal the volumes in the SUV segment increased by 16.64% y-o-y to 6,84,306 units on the back of the healthy demand for compact SUVs like Vitara Brezza, Creta, Ecosport. Compact vehicles like Toyota Innova Crysta have also received good response in the domestic market despite the hiccups caused by demonetisation. According to analysts, there is a marked shift from the buying preference of the customers towards utility vehicles just like other developed markets.
If the market share of utility vehicles is seen, that of Maruti’s during April-February increased to 26.6% against 15.3% in the same period last year and that of Hyundai jumped to 12.63% against 10.3% in the same period last year.
The increased market share of these two players in the UV segment has pulled down the market share of Mahindra and Mahindra to 29.9% against 37.2% in the same period last year.
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In the FY 14, the volumes in the UV segment declined by 5% which was followed by a volume growth of 5.3% in FY 15. The same in FY 16 increased by 5.95%. FY13 was the peak year for the utility vehicles in the domestic market when Ford and Renault launched their respective compact utility vehicles – Ecosport and Duster.
Analysts expect volumes in the segment to grow further in FY 18 when Tata motors will launch its Nexon, the company’s first offering in the compact SUV segment.
“Volume growth in passenger vehicle segment will be led by the SUV segment in FY18 and FY19 as well. We will see new offerings in the segment from Tata Motors, Renault and M&M. This will further increase the share of utility vehicles in the next few years. Globally UVs constitute almost 65% of the total PV sales and India is also moving towards the same direction,”said a consultant with a foreign consultancy firm.