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Saturday, July 24, 2021

Changing gears: Utility vehicles outrace other segments in Q1 sales

According to sales data by the Society of Indian Automobile Manufacturers (SIAM), in the April-June 2021 period, hatchbacks and sedans put together sold 2,83,816 units, while UVs sold marginally more at 2,86,092 units.

Written by Vikram Chaudhary | New Delhi |
July 18, 2021 12:53:33 am
However, the bigger reason is consumers’ realisation that UVs are ‘more car per car’ (incidentally, this was the tagline of Tata Indica, a hatchback).

In what confirms Indian car buyers’ increasing preference for utility vehicles (UVs) over sedans and hatchbacks, the first quarter of FY22 saw the former outselling the latter in the sub-segments where the two are present (excluding the mini segment — cars under 3,600 mm in length — where there are only hatchbacks).

According to sales data by the Society of Indian Automobile Manufacturers (SIAM), in the April-June 2021 period, hatchbacks and sedans put together sold 2,83,816 units, while UVs sold marginally more at 2,86,092 units.

This was a reverse of the trend in the January-March 2021 period, when hatchbacks and sedans sold 3,79,742 units, and UVs trailed at 3,48,194 units.

Part of the reason, analysts said, is six new UVs being launched in recent months (Nissan Magnite in December, new Jeep Compass in January, Renault Kiger and Tata Safari in February, Citroen C5 Aircross in April, and Hyundai Alcazar in June) whose sales picked up in April-June, even as there were no new sedans launched and just two hatchbacks (new Hyundai i20 in November and Tata Altroz iTurbo in January).

However, the bigger reason is consumers’ realisation that UVs are ‘more car per car’ (incidentally, this was the tagline of Tata Indica, a hatchback).

Som Kapoor, partner, automotive sector, EY India, said Indian car buyers have started realising that UVs have comparatively more space, and offer better comfort, driving experience and manoeuvrability, compared to sedans or hatchbacks. “In urban markets in particular, the average car-buying age is coming down, and younger buyers, in general, prefer good driving dynamics and customisation over traditional features such as fuel efficiency,” he said.

Rajeev Singh, partner & leader, automotive, Deloitte India, added that the ongoing shift to UVs, and SUVs in particular, is also because these enjoy higher resale value compared to a hatchback or an entry-level sedan. He said a large number of used cars go to smaller towns, where people are now preferring SUVs as these areas may not have as good a road infrastructure as in urban areas.

“This leads to more demand in the aftermarket, and thus higher resale value of a new SUV,” he said.

Gaurav Vangaal, associate director, IHS Markit, said that in the next three quarters, Maruti Suzuki will launch new generations of the Baleno, Celerio and Alto, which will push hatchback sales, and Tata is expected to launch the Hornbill (an entry-level SUV), which will push UV sales.

“But, overall, with clear consumer preference towards UVs, India will become a UV country by FY23,” he said. FE

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