Sports utility vehicles drive one-fourth of sales of top carmakers

The fast-growing sports utility vehicle (SUV) segment of the passenger vehicle industry is making it a key contributor to the sales volume of leading carmakers. A number of companies are now getting at least one-fourth of domestic sales from the utility vehicles (UVs). For players such as Toyota Kirloskar and Ford, the contribution of UVs to sales is now well over 60 per cent. Japanese carmaker Honda gets over one-third of sales from the SUVs. With the launch of the WR-V last year, the contribution of this segment to total sales doubled to 35 per cent during FY18 against 17 per cent in FY17. Rajesh Goel, senior vice-president and director (sales and marketing) at Honda Cars India, said the rising demand for SUVs was a global phenomenon and he expects this trend to gain momentum in the future. Homegrown auto giant Tata Motors got almost 28 per cent of sales from the SUVs in FY18, thanks to a successful launch of the Nexon and Hexa, both during 2017 calendar year. The contribution of the SUVs in total domestic sales was just 12 per cent in FY17. For Honda and Tata Motors, the rise in SUV contribution is a recent phenomenon while players such as Ford and Toyota had been getting at least half of the sales in SUVs for the past few years. But even these two manufacturers have seen a surge in the contribution from the SUVs. Take the case of Toyota, which thrives on the popularity of the Innova and even Fortuner. The share of SUVs for Toyota stood at a high 53 per cent in FY16 but rose to 64 per cent in FY17 and even higher to 70 per cent in FY18. N Raja, deputy managing director, said the share of the SUVs could go up but Toyota was facing a capacity constraint in the lines used for manufacturing these vehicles. The Innova is the fourth most sold UV in the country. For market leaders such as Maruti Suzuki and Hyundai, both of which have a strong portfolio of small cars - hatchbacks and sedans - SUVs have emerged as a key segment in the last couple of years but accounts for less than one-fourth of the contribution. Korean carmaker Hyundai, the second biggest player in the domestic car market, saw one-fifth of sales coming from the SUVs in FY18, up from 19 per cent in FY17 and 13 per cent in FY16. Creta, which has been one of its most successful launches, was the second most sold UV in the country with a total volume of 107,136 vehicles. Maruti Suzuki, the largest carmaker, has a more diversified UV portfolio — the Ertiga, S Cross and the Vitara Brezza. But due to a large base of small cars and sedans, UVs account for around 15 per cent for the company's sales. The share has doubled from 7 per cent in FY16. The Brezza is the most sold SUV in the country and clocked a volume of 148,462 units during FY18. The Ertiga also stood fifth in the list of top UVs with a volume of 66,141 vehicles last year. For the domestic industry as a whole, UVs brought 28 per cent of the total passenger vehicle sales in FY18, up from 25 per cent in FY17. UV sales in domestic market expanded at an impressive 21 per cent last year to 921,780 units, maintaining the trend of double-digit growth seen in the previous few years. M&M, which primarily is a UV player, gets 94 per cent of volume from the UVs.