Compact sport-utility vehicles (SUVs) and crossovers are shaping up to be the hottest battleground for automakers vying for market share in India, helped by consumers upgrading from hatchbacks and luxury shoppers foiled by a ban on large off-roaders in the capital.
At the biennial Delhi Auto Expo that opens to the public later this week, market leader Maruti Suzuki India Ltd is to unveil its first compact SUV to fend off competitors like Honda Motor Co.
Built on a car platform and combining features of an SUV and a car, crossovers are popular for their blend of space, power and fuel efficiency, while buyers pay less taxes on compact SUVs.
Photo: AFP
“Crossovers don’t deviate much from the core principles of an ‘Indian car’ — inexpensive, practical and high on fuel efficiency,” Emerging Markets Automotive Advisors London-based director Deepesh Rathore said. “The problem with large SUVs is that they’re so big that the weight kills the fuel efficiency. Their size also makes driving and parking in congested areas impractical.”
Winning in the segment is crucial if automakers want to catch market leaders Suzuki and Hyundai Motor Co, which between them accounted for 65 percent of passenger vehicle sales in India last year.
The South Asian nation is to overtake Germany and Japan in 2019 to become the third-biggest vehicle market in the world, behind China and the US, according to researcher IHS Automotive.
With rising incomes and rapid urbanization, passenger vehicle sales in India are poised to accelerate at the fastest pace among all major auto markets over the next three years, according to Emerging Markets Automotive Advisors.
Compact SUVs and crossovers first found favor with urban buyers in 2012 when Renault SA introduced its Duster model. A year later, Ford Motor Co joined the fray with its EcoSport crossover.
Sales in this category have risen 44 percent to 337,205 units in the three years through last year, even as total passenger vehicle sales have stagnated at about 2.8 million units, according to the Society of Indian Automobile Manufacturers.
Mahindra & Mahindra Ltd, the nation’s largest SUV maker and worst hit by the Indian Supreme Court’s temporary ban on big diesel vehicles, is also responding to the market shift. Last month, it introduced a cheap gasoline engine crossover called the KUV100 aimed at first-time buyers. It followed up by offering its Scorpio and XUV500 models, with 1.99-liter diesel engine options, in New Delhi to beat the 2-liter court ban.
All this has led Suzuki’s Indian unit to introduce the Vitara Brezza compact SUV after starting sales of its first crossover, the S-Cross, in August last year. Honda is to present its BR-V, first unveiled last year in Indonesia. At Hyundai, the waiting list to take delivery of the Creta crossover, which made its debut in July last year, has stretched to more than four months.
Maruti yesterday said it would start sales of the Vitara Brezza in a few weeks after unveiling the model, which is to have a 1.3-liter diesel engine and a length of 399.5cm.
“Compact SUVs have been growing quite rapidly and we are quite optimistic about Vitara Brezza,” Maruti R executive director of marketing and sales S. Kalsi said.
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