Small Cars Passé, Foreign Automakers Ride in on SUVs
Close to half a dozen car cos line up utility vehicles for their India debut encouraged by booming sales in the segment
Mumbai: The small car, which has long been seen as the best bet in the Indian automotive market, is slowly being pushed aside by the more glamorous and costlier utility vehicles. The industry sees this as the sign of a maturing market.
Close to half a dozen automakers that are ready to enter the Indian market have lined up utility vehicles as the launch product, in a country where the price and running cost were traditionally the most crucial factors that influenced the buying decisions.
But latest sales trends suggest changes in the behaviour of the Indian consumer. Growth in utility vehicle sales now grossly outpaces the industry. This has encouraged carmakers such as SAIC, Kia, PSA, Borgward and Changan, which are set to enter the market over the next three to four years, to consider driving in an SUV first to woo the buyer here.
Gaurav Vangaal, a senior analyst at forecasting firm IHS Markit, said he is not surprised by the decision of these companies as the SUV segment is going to post a compounded annual growth rate of more than 15% through 2020, compared with 8% for the industry.
Sales of utility vehicle, which include sport- and multi-utility vehicles, totalled 7.6 lakh units in fiscal 2017, more than a quarter of the total passenger vehicles sales in the country.
SAIC, Kia, PSA, Borgward and Changan are set to enter India in 3-4 years