Has India redefined the SUV?

In 2002, Mahindra launched a model called ‘Scorpio’ and by 2005, it became a big hit in the passenger vehicle segment of the country. When Maruti was broadcasting, ‘Ki Karen Papa, Petrol Khatam Hi Nahi Hunda’ television commercials with the protagonist holding a small toy car that resembled the iconic ‘800’ to promote its fuel-efficient variants, Mahindra was selling the off-roading concept to Indian consumers.

Analysts warned that Mahindra’s success with Scorpio might have a ‘Nokia-type’ ending but for the SUVs, it has so far been a Disney tale in India. On October 15, the Times of India published, “India is no longer a small car market.” Times they have indeed changed. As per the TOI report, in September 2021, 87,720 units of SUVs were sold in India against 64,235 hatchbacks and sedans. But in the process, has India redefined SUVs?

“Yes, the original SUV the way we knew it which were rugged utilitarian vehicles which the Mahindra and at one point Tata used to make - that has completely been redefined,” says Hormazd Sorabjee, editor, Autocar India.

“The entry SUV (Sub-SUV or below four-meter length) is the largest selling segment in India (about 20 per cent of total passenger vehicles). Whereas in most other countries it is the larger SUVs that are selling. In other countries off-roading is also a reason for purchase but not in India. That is why most SUVs in India are two-wheel drive and not four-wheel drive,” explains Shashank Srivastava, executive director sales and marketing, Maruti Suzuki.

Girish Karkera, consulting editor of Times Auto, however, is of the view that with the exception of creating a sub-4m segment, India is just following most global trends. “I would say SUV's definition has evolved and now conventional SUVs need to be seen as off-roaders or 4x4s. The latter is possibly the only thing that we are still shying away from but because most of us don't need it as much as Western countries because of the topography and also inclination given the added cost,” he asserts.

Even in the pre-owned segment, there is a constant rise in the demand for SUVs. “The preowned car park is comprised of vehicles that are typically four to seven years old. The Indian new car market has been dominated for a long by Hatchbacks and entry-level vehicles, which explains why in absolute numbers, hatchbacks sell more than SUVs (pre-owned). Having said that, the SUV demand is very high, and sales of SUVs is growing fast in the preowned market,” says Ashutosh Pandey, CEO and MD, Mahindra First Choice Wheels.

But what makes them sell? “They are head-turners,” opines Pandey. Echoes Hormazd Sorabjee, adding, the higher seating condition provides more confidence to the customers in India. “But the most important part is, SUVs today are more car-like,” he says.

Shashank Srivastava shares insights from research to explain why SUVs emerged as the largest selling category in the Indian auto market. He lists, “A) The upright and commanding road presence and driving position. B) Symbol of tough status, lifestyle & perceived safety. C) Large ground clearance to negotiate bad roads in India. D) Larger interior space. E) Smoother engines than the past rough SUVs. F) Flexible luggage space. G) Price overlap between entry SUV with premium hatches and entry sedans thus increased cross consideration across segments. H) Availability of small SUVs which makes parking not such a hassle.

The options available in the market have also changed. Mahindra, that used to lead the segment once has seen its market share slip in the last five years. Korean companies Hyundai and Kia are ruling the mid-size SUV market with Creta that sells 12,000 units a month and Seltos finds 8,500 new buyers every 30 days. One of Mahindra’s recent launches, ‘The Thar’ which is a new generation of the Jeep that Mahindra used to assemble once. In June 2021, Mahindra was quoting 10 months waiting for a Thar as the orders doubled the capacity. If a customer booked a Thar in July 2021, he or she is likely to drive it home only by May 2022.

Two prime reasons for the upward trend in SUVs in India are aspiration and practicality “Or at least its perception,” says Karkera. He adds, “SUV was a body style one graduated to, from a sedan and that's still in the psyche of a majority of us so the aspiration value is up there. SUV is supposed to give us that much extra leeway. Off-road ability is another pull for conventional 4x4s and that has a perception rub-off on SUV body styles generally. Also, just the variety of new SUVs on offer all adds to its popularity.”

In October, Mahindra sold 20,034 units securing a 9.4 per cent growth when compared to the same period last year. The newly launched XUV 700 contributed to 17 per cent of Mahindra’s sales in October. Mahindra trails market leaders Maruti Suzuki, Hyundai and Tata Motors and SUVs remain the biggest contributor to each carmakers’ growth.

Pandemic followed by a shortage of semiconductor chip, the auto industry is driving through several challenges. However, response to recent launches like the Scorpio, Safari, XUV 700, Nissan Magnite has filled the air with perfumes of promise. “Larger bouquet of brands offered by multiple OEMs and organised pre-owned players,” will continue to fuel the growth of SUVs in Indian market concludes, Ashutosh Pandey, CEO and MD, Mahindra First Choice Wheels.

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