Full-sized utility and multi-purpose vehicles are grabbing a disproportionate share of Indian roads, reflecting persistent upward mobility in personal-transport choices underpinned by higher disposable incomes and increasing availability of premium variants.
Sales of sports utility vehicles (SUVs) and multi-purpose vehicles (MPVs) exceeding 4 metres in length now make up at least 10% in volume terms even at compact-car makers such as Maruti Suzuki. The share of sub-4 metre compact vehicles, which enjoy policy preference from a taxation standpoint to encourage car ownership, has shrunk 6 percentage points in three years to 72%.
By contrast, premium vehicles — usually large-sized SUVs and MPVs exceeding 4,500 mm in length — now account for 11% of the industry, up from 6% three years ago. The 4-4.5 metre passenger vehicle segment has seen its share stagnate at 16-17%.
Carmakers, therefore, are harnessing the rising affordability quotient to introduce new models in the above 4.5-metre mid- and upper-SUV and MPV segments. Previously, this segment was dominated — both in volume and value terms — by the likes of Mercedes, BMW, Jaguar-Land Rover and Audi.
Luxury carmakers continue value domination in this segment, but mass market players such as Maruti Suzuki, Mahindra and Mahindra, Honda, Hyundai, Kia, VW and Toyota are also increasing volume presence.
Lifestyle Choices
India’s largest car maker Maruti Suzuki, known world over as the king of compact cars, said there is a trend toward bigger and lifestyle products.
“That explains why there is traction for three-row MPVs and SUVs. These vehicles support varied lifestyle needs of a modern, urban consumer, and also allow larger family groups or friends to travel together on occasions,” said Shashank Srivastava, Senior Executive Director, Maruti Suzuki.