The sport utility vehicle (SUV) segment carried on its handsome run in the passenger vehicle (PV) market in 2023, inching closer to a 50% share, as a slew of introductions, both new models and updates, including facelifts and product enhancements, continued to drive demand.
From January to November 2023, the SUV segment witnessed a volume of 18,52,926 units with an impressive market share of 48.13%, according to data from automotive analytics and consulting firm JATO Dynamics.
In the same period, the hatchback segment registered wholesales of 11,72,893 units with a market share of 30.46%, the multi-purpose vehicle (MPV) segment accounted for 4,53,714 units at 11.78% market share and the sedan segment clocked 3,70,297 units with 9.62% market share.
The PV market has grown substantially over five years from 2019 to 2023. While the SUV segment has taken the largest strides during this period, the hatchback, MPV and sedan segments have either shrunk or recorded meagre growth.
What do industry executives have to say?
Talking to India Today, Maruti Suzuki India’s Senior Executive Officer for Marketing and Sales, Shashank Srivastava, said that the company’s internal research shows the growth of the SUV segment plateauing at around 54-55%.
“The recovery in other segments looks a bit difficult,” Srivastava said, adding that till the time the plateauing in the growth of the SUV segment comes, you can expect other segments to have a general decline.
“SUVs are liked for their versatility, space, high driving stance and road presence. SUVs generally give you a feeling of having arrived in life,” said Tarun Garg, Chief Operating Officer, Hyundai Motor India.
SUVs launched in 2023
A host of SUVs were launched in 2023. Maruti brought the Fronx and the Jimny, giving more teeth to its line-up. “We were only 12% of the SUV market last year. We have now strengthened the portfolio with four models,” Srivastava said. The carmaker also offers SUVs like the Brezza and the Grand Vitara.
“Throughout the year, at least till August, we had problems with the availability of semiconductors. We are looking to expand the production, which is now possible as the semiconductor crisis seems to have abated,” he added.
Hyundai updated the Venue with an advanced driver assistance system (ADAS) in 2023. It also introduced the special edition versions of the Creta and Alcazar. However, the most important SUV to have been added to the carmaker’s portfolio was the Exter, which won the prestigious award.
Garg pointed out that 2023 saw Hyundai become a full-range SUV manufacturer with the introduction of the entry-level model, the Exter.
“The Hyundai Exter has received an overwhelming response, with over 75% bookings for the variant with premium features such as sunroof,” he said.
While Tata Motors launched the facelift versions of the Nexon, Harrier and Safari in 2023, Mahindra & Mahindra introduced the Thar rear-wheel drive (RWD), making the popular off-roader more affordable. Among the other notable SUV launches of the year were the Kia Seltos facelift and the Honda Elevate.
Even for the luxury carmakers, 2023 was a busy year. While Mercedes-Benz India introduced the new GLC and the new GLE, among others, BMW India brought the X1, X5 and X7. Audi India launched the new Q3 Sportback and the limited edition versions of the Q5 and the Q8.
Reasons for the growing popularity of SUVs
According to JATO Dynamics India President and Director Ravi Bhatia, SUVs are witnessing a rise in their sales due to a variety of reasons, including commanding driving position, high ground clearance, flexibility of the interior space, powerful engines, rising disposable incomes, and marketing and branding.
Form factor: The driving position of SUVs is very upright. Drivers feel that they are in command while on the road and that is a major positive that they have expressed about SUVs.
High ground clearance: SUVs provide better ground clearance, which is advantageous in India’s context of rough roads and potholes.
Utility and practicality: SUVs offer more space, flexibility and cargo-carrying capacity compared to sedans and hatchbacks, making them ideal for families and those with active lifestyles. This is particularly appealing in a country like India with large families and a growing taste for outdoor adventures.
Powerful engines: Many SUVs come equipped with powerful engines, offering a thrilling driving experience and catering to the growing demand for performance-oriented vehicles.
Rising disposable incomes: The growing Indian middle class has witnessed a rise in disposable incomes, leading to increased spending on automobiles. The SUVs, once considered premium vehicles, are now becoming more accessible to a wider segment of the population.
Emergence of sub-4 metre SUVs: The sub-4 metre SUVs are quite affordable now and almost all of them can be had for less than Rs 10 lakh (ex-showroom). There is also a price overlap with premium hatchbacks and entry sedans. Hence, there is a lot of cross-consideration happening.
Marketing and branding: Automakers have invested heavily in marketing SUVs, highlighting their adventurous image, ruggedness and family-friendliness. This has created a strong aspirational value around SUVs, further fuelling their popularity.
Growing awareness of safety: SUVs are often perceived as being safer than other vehicles due to their larger size and sturdier build. This is a major factor influencing purchase decisions, especially for families with children.
Bhatia, however, opined that the SUV segment is not without its challenges. “Concerns regarding higher fuel consumption, emissions and the overall cost of ownership remain. However, the factors mentioned above have collectively contributed to the phenomenal rise of SUVs in the Indian market, and their dominance is likely to continue in the foreseeable future,” he said.
