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Size problem! Indians forgo small cars for utility vehicles and mandatory brands

The year 2022 will be a cornerstone in the history of the Indian auto industry. After decades of dominance, small and economy-class cars are finally facing extremely stiff competition from utility vehicles with more and more potential buyers preferring the latter. While demand for utility vehicles has increased over the past few years, the popularity of small passenger vehicles has been relatively muted.

Shubhodeep Chakravarty

Update on:
January 3, 2023, 10:19 am

Image files are used for representation purposes only.  (REUTERS)
Image files are used for representation purposes only. (REUTERS)

The Association of Indian Automobile Manufacturers (SIAM) data reveals that production of utility vehicles – including compact and small SUVs – is close to the production of low-end cars. The pattern and trajectory of the growing demand for such vehicles has come to the point that even Maruti Suzuki – the country’s largest automaker – emphasizes its focus on big cars. and launched the Grand Vitara compact SUV. While the company also emphasizes that small cars will remain their forte, there’s an admission that this alone won’t cut it any further.

Watch: Maruti Suzuki Grand Vitara: First Ride Review

While UV boosted Maruti’s sales by 22.3%, Mahindra and Mahindra benefited from an SUV-only strategy with a 62.2% increase in sales. The days of Verito, Marazzo and even the KUV100 are long gone, and instead names like Thar, XUV700, Bolero, Scorpio and Scorpio-N are powering the company’s sails.

Relatively new players like Kia India and MG Motor India have been sprinting for about three years of their respective India presences and a look at each one’s product portfolio can reveal why at star. Kia started the Indian leg with the Seltos small SUV and was followed by the Sonet compact SUV. Carnival, its premium MPV, wasn’t a huge hit but the Carens – a cross between an SUV and MPV – has also been well received. Similarly, MG started with the Hector compact SUV and now offers the Astor as well, in addition to a few other models.

At Tata Motors’ camp, Nexon’s small SUV remains a best-seller while Harriers and Safaris enjoy a high degree of popularity. Even thinking small, the company’s Punch was given an SUV-ish design profile.

Special edition models are another way Tata Motors is trying to capture the interest of buyers.

Special edition models are another way Tata Motors is trying to capture the interest of buyers.

Toyota remains a dominant force in the premium SUV segment with the Fortuner refusing to give way to any rivals. Even the newly launched Innova Hycross was praised for its SUV design language. Did someone say Yaris? That was taken off the shelf a long time ago.

Hyundai is also very proud of its SUV lineup with the Creta remaining a strong player in its segment while the company updated the Venue small SUV last year. In the premium segment, Koreans drove an updated Tucson SUV with ADAS or Advanced driver assistance systems.

Out of all these notable players, Honda Cars India remains one of the very few brands that don’t offer an SUV or SUV-ish vehicle but reports suggest it is getting ready to launch one. Compact SUV to compete with Creta and Seltos in the Indian market, sometime in 2023.

Also read: 2023 could be the year of electric SUVs

In the luxury space, however, it’s more evenly matched between SUV and sedan with the Mercedes E-Class LWB remaining the German’s best-selling model, though not by much. Audi also says that its new models like the updated Q3 and Q5 SUVs are as much in demand as the updated Audi A8 L.

But looking back a lap, the mass market segment is where the Indian auto industry still beats and is experiencing a massive shift in the tectonic rate. Does that mean the purchasing power of the typical Indian buyer has increased? It means the models in $10 thousand to $The 20 lakh price bracket provides a fertile ground for brands? And what could that mean for the dismal penetration of personal cars in India – yes, still bleak – relevant? The year 2023 can provide an overview of these evolving trends.

(With input from Reuters)

First published date: January 3, 2023, 10:19 a.m. IST


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