4 days ago
India's automotive market is seeing rising demand for micro SUVs, offering a boost to the domestic car industry amid this year's broader slowdown in sales.
Models like Hyundai Motor India's Exter and Tata Motors' Punch, priced under Rs 10 lakh, are leading the charge, with sales rising by 72 per cent in the first four months of this financial year. This growth far exceeds the 1.8 per cent increase in overall domestic passenger vehicle sales, according to a report by Economic Times.
According to data from automotive consultancy Jato Dynamics, a total of 175,330 small SUVs were sold between April and July 2024, up from 101,855 units in the same period the previous year, the report stated.
The additional 73,475 units sold in this segment offset the decline in hatchback and small car sales, which fell by 69,936 units during the same time frame.
Small SUV sales largely come from Tata Punch and Hyundai Exter, while entry-level variants of compact models like Maruti Suzuki Brezza, Hyundai Venue, and Tata Nexon also contributed.
Entry of new players
New players are entering this rapidly expanding segment. Kia Motors is preparing to launch its first micro SUV, the Clavia, and Hyundai is making the Bayon compact SUV, which will compete with Maruti Suzuki's Fronx. Skoda, part of the Volkswagen Group, is also set to introduce its Kylaq compact SUV early next year.
The strong performance of small SUVs has increased their share of vehicles priced up to Rs 10 lakh by 11 per cent between April and July 2024, a trend that has come at the expense of hatchbacks, which saw a 17 per cent drop in sales during the same period, the report said.
Affordable SUVs see rise in sales
The report quoted industry experts as saying that this shift is due to rising aspirations among rural buyers and the growing availability of affordable SUVs, which are perceived as more versatile and spacious than hatchbacks and entry-level sedans.
Sales of micro SUVs have surged, lifting their share of the overall SUV market to 13 per cent between January and August 2024, compared to 9.8 per cent in 2023.
Maruti Suzuki is reportedly developing a micro SUV to compete with Tata Punch and Hyundai Exter. Positioned below its popular Brezza compact SUV, the new model is expected to hit the market within two years, sources said, as mentioned in the report.
