Move over small cars. Compact sports utility vehicles (SUVs) are set to be the next big thing in Motown with several automakers lining up models to grab a bigger pie of the nascent segment.
Companies including Ford India and Renault showcased their compact SUVs at the recent Auto Expo in Delhi in January with plans to launch them in 1-2 years.
Maruti Suzuki, which sells most cars in the country, too, is pushing hard to bring a compact SUV as soon as possible as it battles to keep its dominance intact in the market that is getting increasingly spoilt for choice.
Interestingly, there is only one offering in the compact SUV space — Premier Automobile’s Rio.
Maruti which showcased its XA Alpha (the compact SUV) at the Auto Expo may look at getting the product soon to gain an early-mover advantage.
Shinzo Nakanishi, managing director and CEO, Maruti Suzuki India, said, “We showcased the concept of the compact SUV. We got a big response from the public. Last month when I went to Japan (Suzuki headquarters), I mentioned that most of the companies had displayed their compact SUVs and we need to hurry. We have not decided yet, but at least I have reported this to Japan.”
2011 hasn’t been a good year for the market leader as labour issues and growing competition affected the company’s volume growth. For the quarter ended December, Maruti sold 211,803 units in India, 29% less than the 299,527 units sold in the same period last fiscal.
The automaker is now looking at newer segments to defend its market share.
Showing the importance of SUVs in the scheme of things, Ford chief executive Alan Mulally flew down to India to unveil its compact SUV - Ecosport. Similarly, Renault will soon launch its compact SUV Duster in India.
Abdul Majeed, auto practice leader, PricewaterhouseCoopers thinks that product strategy is extremely important for the product to be successful in the market.
“It is necessary to create a segment before the competition gets tough and the compact SUV has a potential within a different set of customers’ profile. However, convincing customers that it’s a value-for-money product could be difficult,” Majeed said.
“We would like to maintain our market share at 40%. To maintain this share, we will have to relook at the product portfolio. One of the solutions or a counter measure was to introduce the Ertiga.
Currently, MPVs/SUVs contribute 14% to the overall volume of the industry and we are nowhere present. We, therefore, needed to show some presence with Ertiga, which will help us in increasing our presence across different segments,” said Nakanishi.
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