Utility Vehicles outsmarting sedan sales in India for the first time

The die was cast and the inevitable has happened. The history book of Indian automotive industry filed a new chapter as the unified sales of Utility Vehicles (UV) outpaced those of sedans, which were recorded during the first five months of the current fiscal. The UV sales comprised Sports Utility Vehicles (SUV) and Multi-purpose Utility Vehicles (MUV).

The UV market saw the addition of Mahindra XUV500, Maruti Suzuki Ertiga and Renault Duster this year, which contributed to the bulk of passenger car sales (40,000+ units) in the country. The massive difference between the fuel prices of diesel and petrol resulted in the sluggish sales of petrol-run vehicles, with many Indian buyers opting for diesel options, instead.

Reportedly, during the period April-August, the UV segment recorded a jaw-dropping surge of 57.03 per cent in vehicle sales in the country at 2.08 lac units. The segment now contributes to one-fifth of the overall Indian market and witnessed a 13.52 per cent increase from last year. Interestingly, the sales recorded in the sedan segment during the period April-August of the current fiscal stood just shy of 1.97 lac units and witnessed a growth of 15 per cent; as compared to the same period last fiscal. The overall share of the sedan segment in the country is 18.73 per cent, at present.

The Indian passenger vehicle market witnessed a growth of 7.2 per cent in the first five months of the current fiscal, at approximately 10.5 lac units. In contrast to the unexpected surge in the UV segment, the market share of small passenger car dipped to 53 per cent, as compared to 59 per cent in the corresponding period last year. Further, the sales of small car segment declined by 3.36 per cent during the first five months of the current fiscal, which is not surprising due to the lack of diesel models in the entry-level car segment.

The UV segment's rampant growth has baffled the industry economics and several car makers are lining-up with new their products dedicated at the segment in the country. The UV market may soon see the launches of Mahindra Quanto, Nissan Evalia, Chevrolet Enjoy, Ssangyong Rexton and Ford EcoSport on the domestic turf, all of which will be available at a price bracket of Rs. 6 to 12 lacs. Dubbed as the younger sibling of Xylo MPV, Mahindra and Mahindra has pitched the upcoming Quanto in a direct competition against Hyundai i20 and Maruti Suzuki Swift.

Len Curran, Vice President, Sales and Marketing, Renault India, has affirmed that hatchbacks will continue to be the dominant segment in the Indian passenger car market for some years to come and the company is positive that the UV segment will rise to fourth spot in terms of market share, in the near future. He further said, “The segment is going to explode because many of the new products on the anvil offer the comfort of a sedan and practicality of a SUV.”

Pravin Shah, Chief Executive, Automotive, Mahindra and Mahindra, believes that mentality of Indian buyers is slowly shifting towards the UV vehicles, just like the South-east Asian markets where the segment contributes to the 40-45 per cent of the overall passenger vehicle sales. Expressing his views on the UV market, Shah said, “Specific to India, this evolution has been led by rising disposable income, living habits and our propensity to work during the week and drive out on weekends. The products today offer best possible options of seating capacity, space and versatility, among others, and there is enough choice for customers who desire to have this kind of flexibility.”