The Evolution of the SUV Market in India

In India, cars are considered a status symbol, and many car buyers seek vehicles with a strong road presence. The demand for SUVs in India has surged significantly due to their versatility, comfort, and perceived safety. With younger buyers prioritizing features like better connectivity, advanced driver assistance systems (ADAS), and sunroofs, there is a high preference for SUVs and top variants across models.

The Mahindra XUV500, introduced by Mahindra & Mahindra in September 2011, was one of the first SUVs in India, gaining quick popularity and significantly contributing to the SUV segment in the Indian automobile market.

The Appeal of SUVs in India

In India, SUVs symbolize more than just transportation; they represent a lifestyle choice embraced by an ever-discerning populace. From navigating bustling city streets with poise to venturing off the beaten path with confidence, SUVs epitomize versatility and rugged elegance. Their commanding presence on the road symbolizes not just mobility but a statement of status and aspiration.

SUVs are family cars. As consumer preference shifts away from low-slung sedans, SUVs have found a sweet spot in overlapping price segments. New safety regulations have increased the prices of entry-level hatchbacks, making the road presence and comfort that SUVs offer more appealing. Automakers are prioritizing SUVs over premium hatchbacks and entry-level sedans, incorporating engines and drivetrains from these segments into compact and mid-sized SUVs.

Ground clearance is an essential factor when it comes to Indian roads. With ongoing construction projects for subways, railway tracks, and flyovers throughout the country, high ground clearance ensures smooth passage over uneven patches. Safety features like six airbags have become a standard offering by most manufacturers, providing enhanced protection. SUVs in India prioritize comfort with spacious seating, effective air conditioning, and smooth suspension, offering adjustable seats, ample legroom, and headroom for passengers.

The SUV Market in India

SUVs now make up half of all passenger vehicle sales in India, doubling their market share in five years. In September alone, 52% of the 363,733 passenger vehicles sold were SUVs, a record for a single month, marking a nearly 20% spike from September 2022.

Some of the top-rated SUVs in terms of safety include the Tata Safari, Tata Nexon, Volkswagen Taigun, and Skoda Kushaq, all boasting high Global NCAP safety ratings. Tata Motors leads with the largest portfolio of SUVs with five-star safety ratings.

One of the most significant positive impacts comes from the shift towards electrified SUVs. Companies like Toyota are leading the charge with their wide range of hybrids, plug-in hybrids, battery-electric, and fuel-cell electric vehicles. These innovations indicate that while traditional SUVs have had a negative environmental impact, modern electrified SUVs and sustainable practices by automakers are paving the way for a more positive environmental footprint.

The SUV craze has also contributed to job creation and economic growth within the automotive industry and related sectors. Increased production and sales of SUVs have expanded the workforce and created employment opportunities across various functions, including manufacturing, sales, marketing, and after-sales service. The growth of the SUV segment also drives economic activity and prosperity in ancillary industries such as auto components, logistics, and retail.

Challenges in the SUV Market

SUVs in India encounter several challenges. High initial costs and lower fuel efficiency lead to elevated running expenses, making them less economical for many consumers. Their large size complicates navigation and parking in densely populated urban areas. Poor road conditions can result in frequent, costly repairs.

Environmental concerns are significant, as SUVs typically produce higher emissions, prompting stricter regulatory standards that further increase costs. The added weight of SUVs puts more strain on their tyres and brakes, leading to higher maintenance costs. Additionally, finding parking space for larger SUVs can be challenging in densely populated cities where parking spots are limited and designed for smaller cars.

Excessive taxation on SUVs can hamper the growth of the automotive industry. High-duty taxes on imported SUVs can discourage foreign manufacturers from entering or expanding their presence in the Indian market, limiting consumer choice and technological advancement.

The Future of the SUV Market in India

The global SUV market is expected to reach USD 1,678.34 billion by 2033, growing at a CAGR of 6.53% from 2023 to 2033. Here’s a glimpse of some upcoming SUVs in India:

1. Audi Q8 Facelift: Expected price: ₹1.10 crore-₹1.40 crore. Launch: Early 2024. Engine: 3.0L turbo-petrol.
2. Ferrari Purosangue: Expected price: ₹6 crore. Launch: Early 2024. Engine: 6.5L petrol. Ferrari’s first SUV with a V12 engine.
3. Force Gurkha 5-Door: Expected price: ₹15 lakh. Launch: Mid-2024. Engine: 2.6L diesel. A long-wheelbase version with multiple seating options.
4. Hyundai Creta Facelift: Expected price: ₹11 lakh-₹20 lakh. Launch: Early 2024. Engine options include petrol and diesel.

ADAS technology will significantly enhance the safety of SUVs in India. Features like adaptive cruise control, lane-keeping assist, and automatic emergency braking will reduce accidents. Increased consumer demand and awareness will drive the adoption of these technologies. Regulatory bodies might mandate certain ADAS features, further accelerating their implementation.

Hybrid SUVs that combine internal combustion engines with electric power are gaining traction, offering improved fuel efficiency and reduced emissions. The growth of India’s tourism industry directly impacts the demand for SUVs, making them a preferred choice for travellers and adventure seekers alike.

Conclusion

The SUV market in India is experiencing significant excitement with the introduction of various new and updated models. In 2024, several key launches and facelifts are anticipated to cater to the growing demand for SUVs across different segments.

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