SUV segment's pace of growth was little surprising, says Maruti's Shashank Srivastava

By Varun SinghAlthough the growth of the sport utility vehicle (SUV) segment was anticipated, the pace at which it grew was a little surprising, according to Maruti Suzuki India’s senior executive officer for marketing and sales, Shashank Srivastava.

GROWTH OF THE SUV SEGMENT

From 16% in FY16, the share of the SUV segment in the country’s passenger vehicle (PV) market has climbed to nearly 43% in FY23 so far. Also, the number of SUV models has jumped from 27 in FY16 to 46 now, which includes 14 entry SUVs, 20 mid SUVs and 12 premium SUVs.

The domestic PV volumes stood at 2,789,678 units in FY16 with SUVs accounting for 447,000 units. According to industry projections, the PV market will touch 3,800,000 units in FY23 with SUV sales being around 1,635,000 units.

“We have made projections. Till 2030, it (SUV share) will steadily go up but plateau around 49% mark,” Srivastava told India Today.

He said that in markets like the US, China, Europe, South America and the Middle East, there has been a huge growth in the SUV segment, and in those countries, the growth happened a little earlier.

“In India, there has been a lag of a couple of years. The share of SUVs has touched 50% in most markets. So, it seems to have plateaued at around 50%. We are still a bit away from it, but it looks like we can go up to that 48-49% as per our projections going forward,” he pointed.

Among the reasons for the rising popularity of SUVs are their upright driving stance, high driving position, relatively better ground clearance and flexibility of space usage.

Srivastava also noted that there is a lot of cross-consideration of the consumers of entry sedans and premium hatchbacks.

“The reason being a price overlap. The price overlap happened because we discovered the compact SUV segment, which attracts taxes similar to the hatchback segment,” he said.

The maximum growth has been observed in the entry SUV segment, which has widened from 4.8% in FY16 to 23% now. This segment includes models like the Maruti Suzuki Brezza, Tata Nexon, Hyundai Venue, Kia Sonet, Mahindra XUV300, Tata Punch, Renault Kiger and Nissan Magnite.

“The pace at which the SUV market grew was probably not anticipated. On the other hand, it was anticipated that there would be growth in the SUV market,” Srivastava said, adding that the pace was a little surprising.

MARUTI’S STRENGTHENED SUV PORTFOLIO

In FY22, Maruti had a 20% share in the entry SUV segment with the Vitara Brezza and around 3% in the mid SUV segment with the S-Cross. The overall share in the SUV segment stood at nearly 10.8%.

“In H1 FY23, it came down a bit to 10.3% as the S-Cross was discontinued,” Srivastava said. Launched in India in 2015, the S-Cross was axed following an underwhelming performance with cumulative volumes of merely 165,000 units.

Maruti’s SUV portfolio now includes four models — Brezza, Grand Vitara, Jimny and Fronx.

The company launched the new Brezza (earlier known as the Vitara Brezza) in June 2022 and the new Grand Vitara in September 2022. Both Jimny and Fronx were unveiled on January 12 at the Auto Expo 2023 with the bookings for the two models opening on the same day.

Maruti had 70,000 pending orders for the Brezza and 45,000 pending orders for the Grand Vitara towards the end of last week. While the Jimny had garnered 20,000 bookings, the Fronx had received 10,000 bookings.

In January, the company’s SUV market share was over 16%. However, this would have been higher if not for semiconductor constraints, it claimed.

Although Maruti is getting almost 17,000-18,000 bookings a month for the Brezza, it is able to produce only about 13,000 units because of chip-related issues.

“While the Brezza and the Grand Vitara have done very well with the SUV market share increasing from 10.3% in H1 FY23 to 16% in January, it could very well have been in the 20s had we produced more,” Srivastava noted.

MARUTI’S SUV SEGMENT TARGET

With a strong portfolio, the company has set a goal to become the largest SUV player in India in FY24. As many as 51 models, out of which Maruti will have four, are expected in the SUV segment in the next fiscal.

“The full effect of the Grand Vitara will be there. We will have the Jimny and the Fronx as the supplies will commence towards the end of March or the beginning of April. The Brezza is also doing well. Hopefully, the semiconductor supply will be better,” Srivastava said.

He also noted that with the real driving emission (RDE) norms kicking in from April 1, the diesel models will become very expensive and this might work in favour of Maruti as the company only sells gasoline-based models.

“In the entry SUV, 81% sales now come from petrol. With the advent of the Grand Vitara, we should see the diesel percentage coming down in the mid SUV segment also,” he said.

According to industry experts, diesel vehicles might witness a price hike of as high as Rs 1.50 lakh depending on their engine lifecycle in terms of technology.

“Our expectation is that for the competition, which has a large portfolio of diesel vehicles, probably they will have a disadvantage because the diesel vehicle prices itself will go up,” Srivastava said.