Vinay Khattar, senior VP and head of research, Edelweiss, told dna, "There is a lot of interest building around compact SUVs recently. We have seen volumes soar for these companies, thanks to their compact SUV brand."
As the new compact sports utility vehicles (SUV) segment drives up the expectation levels of the price-sensitive Indian customers, almost every passenger car manufacturer in the country is betting big on their new compact SUV models. After the success of two products — Renault Duster and Ford Ecosport – the segment has suddenly gained prominence in the domestic automobile market.
While Nissan launched a powerful Terrano, Hyundai has joined the race with its stylish Creta. Joining the fray is the biggest manufacturer of utility vehicles, Mahindra & Mahindra, which is set to launch its new compact SUV – TUV300 – by mid-September. Maruti's compact SUV, Maruti Suzuki XA Alpha, has already created a great amount of buzz in the market.
Vinay Khattar, senior VP and head of research, Edelweiss, told dna, "There is a lot of interest building around compact SUVs recently. We have seen volumes soar for these companies, thanks to their compact SUV brand." Bharat Ginani, senior automobile analyst, says the main factor that will have a positive impact on the passenger vehicle market is the good number of launches in the compact SUV segment.
According to Society of Indian Automobile Manufacturers (SIAM) data, the total sale of passenger vehicles in June is down 0.54% at 2,17,642 units, from 2,18,828 during the year-ago period. However, auto experts view the compact SUV segment as a real game changer. "Yes, in the last 2-3 years, we have seen compact SUVs being a game changer for companies like Ford and Renault. For instance, Duster today accounts for 86% of Renault India's production and 81% of its sales."
Companies like Maruti Suzuki, Honda, Hyundai and Tata Motors are expected to launch their respective products in the compact SUV segment by early 2016. Pawan Goenka, executive director of M&M, said the design of the TUV300 has been inspired by a battle tank with raised shoulders, high front nose, flat roof, high ground clearance and straight bonnet, during a recent unveiling of the product. "We will share the details of the product with pricing around the time of launch in mid-September. The product will address the needs of those customers who are looking for a pure SUV in the segment," said Goenka, adding that 'T' in the brand name stands for `tough'.
With the compact SUV segment gaining traction, the competition is bound to increase. "Apart from the existing models and the upcoming ones, we are also expecting to see more models from the stables of Hyundai, Honda, Volkswagen and Mahindra flood the market this year. Hence, there is bound to be immense competition in this space," says Vinay.Pawan Goenka agrees. "We have to prepare ourselves for the competition."
"The entire auto sector sector is on a recovery path. The first quarter has shown 6% growth. I believe 2015-16 will be much better than 2014-15," said Ginani.
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