The sports utility vehicle segment has become the largest-selling car body type in the Indian market in 2022. The SUV overtook the humble hatchback, which was the primary choice for millions of Indians over the years.
SUV sales have doubled since 2019
Increased affordability due to rising disposable income and high decibel new vehicle launches over the years has expanded the bouquet of choices for the prospective Indian buyer. As per the data sourced from Jato Dynamics India, the sales of hatchbacks in 2022 stood at 1.24 million versus SUVs at 1.47 million units.
Over the last four years, the volumes of hatchbacks have come down – in 2019, the number stood at 1.37 million. In the same time frame, the sales of SUVs have almost doubled from 7.77 lakh units to 1.47 million units in 2022.
| Volumes by Body Type | ||||
|---|---|---|---|---|
| Body type | 2019 | 2020 | 2021 | YTD 2022 |
| SUV | 7,77,160 | 7,16,976 | 11,85,093 | 14,76,911 |
| Hatchback | 13,70,282 | 11,52,887 | 12,47,542 | 12,43,685 |
| MPV | 3,55,128 | 2,87,663 | 3,63,550 | 4,25,239 |
| Sedan | 4,69,183 | 2,88,848 | 3,08,286 | 3,93,112 |
| Grand Total | 29,72,786 | 24,47,697 | 31,04,842 | 35,39,213 |
Ravi Bhatia, president, Jato Dynamics India, says SUVs are considered to be a boom that became a long-term trend and continues to drive the growth in the industry. SUVs saved many OEMs from the financial crisis years and are now the only source of profits for many carmakers.
“The SUV body style allows OEMs to earn more profit than on the hatchback platform,” Bhatia said. “They are popular because of their high driving position, which gives a sense of safety when driving, especially the older people. Plus, the ground clearance is higher, it is more comfortable to get in and out, also especially for older people.”
One of the key contributors to the SUV segment was the launch of the entry-level Tata Punch SUV. It was aided by the entry of Maruti Suzuki Grand Vitara in the midsize SUV space, along with its global alliance partner Toyota’s Urban Cruiser Hyryder, which has brought in the incremental volumes.
Shashank Srivastava, senior executive director, Sales and Marketing at Maruti Suzuki, says the increased preference towards SUVs has been due to the design, strong road presence, high ground clearance and seating position, and the flexibility in usage of interior space. "There is an overlap in consideration, as the entry SUV prices have started overlapping with premium hatchbacks and entry sedans in the market," added Srivastava.
SUVs likely to account for 42 percent of total PV sales in 2022
The launches of entry-level SUVs took a sizable chunk of hatchbacks and entry sedans from the marketplace. The share of the hatchbacks in the market is likely to be the lowest ever in several decades at 35 percent. At the end of calendar year 2022, the SUV segment is likely to account for 42 percent of total passenger vehicle sales, up from 26 percent share the segment had in 2019. Meanwhile, the share of hatchbacks in the same timeframe has dropped from 46 percent in 2019 of the overall market to 35 percent at the end of 2022.
| Volumes by Body Type (percent share) | ||||
|---|---|---|---|---|
| Body Type | 2019 | 2020 | 2021 | YTD 2022 |
| SUV | 26.1 | 29.3 | 38.2 | 41.7 |
| Hatchback | 46.1 | 47.1 | 40.2 | 35.1 |
| MPV | 11.9 | 11.8 | 11.7 | 12.0 |
| Sedan | 15.8 | 11.8 | 9.9 | 11.1 |
The share of SUVs is inching closer to evolved markets like Europe, where 45 percent of the sales comes from this segment. In the last three years, the choices in SUVs have gone up from a dozen models to over a couple of dozen, and today the vehicles are available from a price point of Rs 6 lakh going upwards of Rs 1 crore.
And the SUVs also come with a multitude of powertrain options – right from petrol, diesel, hybrid and electric for a buyer to choose from. Tata Motors, the country’s third largest carmaker, has capitalised from the multi-powertrain strategy – of offering petrol, diesel and electric options on the Nexon SUV. This has made the car the highest-selling SUV in the market with a monthly volume of 15,000 units. The Nexon, in tandem with the Punch, helped Tata Motors grab the leadership position in the SUV segment.
Given the shift in preference for SUVs, new entrants like Kia and MG have exclusively focused on the growing utility vehicle space.
Bhatia says the SUV’s popularity is so big that brands who have historically been about sports cars, luxury sedans are now selling more SUVs than those cars. Porsche, Volvo, Rolls-Royce, Lamborghini, for instance.
Over time, the offering has also improved a lot and SUVs have transformed from being boxy and expensive (old Land Rovers and Toyotas) to become more modern and affordable.
Source - JATO Dynamics India
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