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In the fast lane: Compact SUVs beat slowdown, overtake compact sedan numbers for 1st time ever

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  • In the fast lane: Compact SUVs beat slowdown, overtake compact sedan numbers for 1st time ever
    2019-09-17, By: System Administrator

    The compact SUV segment is the only one to have grown this fiscal.

    Buoyed by two new launches, compact sports utility vehicles (SUV) have emerged as a stand-out segment in India’s domestic car market, even as each of the other segments has borne the brunt of the worst auto slowdown in decades.

    For the first time ever, the segment, which includes the likes of Mahindra XUV 300, Maruti Suzuki Brezza and Tata Nexon, has outsold the compact sedan segment, which has cars like Maruti Suzuki Dzire, Honda

    Amaze, Hyundai Xcent and Tata Tigor.

    At an average sales of 27,000 units a month, the compact SUV segment has overtaken the compact sedan segment, which clocked an average of 24,600 units during the five months period of April-August.

    Compact SUVs have clocked a growth in each month of the April-August period as compared to a fall of 30-60 percent in other segments including hatchbacks, compact and executive sedans.

    Compact SUVs are fast gaining ground in India, thanks to being more spacious and having high seating stance, better ingress and egress abilities and better driving capabilities on potholed or flood-hit streets. Several of the recently-launched SUVs are also armed with new, interactive and tech-powered features, compact SUVs are fast gaining ground in India.

    These offerings seem to have clicked with customers, despite the higher price point -- the average compact SUV is costlier than the compact sedan by about Rs 80,000-Rs 1.2 lakh.

    The cumulative growth during the April-August period for the compact SUV segment stood at 17 percent.

    With volumes of compact sedans comprising models like Maruti Suzuki Dzire, Honda Amaze, Hyundai Xcent and Tata Tigor halved during the April-August period, the buying pattern is indicative of the consumer shift to compact SUVs.

    Compact sedan sales may have further taken a hit from a slowdown in buying for the Ola and Uber fleet, which were heavy purchasers of such cars. About 12-15 percent of the stock of a particular compact sedan used to go to the commercial buyer. With the market slowdown, the share of the commercial fleet buyers has dropped to 4-5 percent.

    The launch of Hyundai Venue and Mahindra XUV 300 in recent months also helped boost the compact SUV segment. Pressure from the new launches also drove hefty discounts on older models such as Maruti Suzuki Brezza and Tata Nexon which helped bring in consumers. Ford Ecosport and Mahindra TUV 300 are the other models in the segment.

    Despite the broader slowdown in the market, Hyundai has managed to keep its production rate to the maximum, thanks to two bestselling SUVs: the compact SUV Venue and the midsize SUV Creta.

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