SUVs are set to take over the rapidly modernising Indian roads over the next couple of years
After a flurry of rollouts of much anticipated utility vehicles on Indian roads, the world’s third largest automobile market is set to welcome yet another power-pack on wheels on 10 July, 2023, as Hyundai Motor India introduces its first micro-SUV, EXTER, offering unique and exciting experiences for new-age customers, that the Korean car maker has been best known to do since coming to India. The EXTER is an appetizer ahead of about half a dozen completely new SUVs which are set to take over the rapidly modernising Indian roads over the next couple of years on the back of visibly growing preference among car buyers for models with high seating, roomy interiors and high ground clearance.
For India, these dynamics strongly underline its ambition to become an automobile manufacturing hub and part of the global supply chain but the mini coup by SUVs on Indian streets—by no means an exaggeration—is endorsed by a report by Primus Partners which pegs the value of the passenger vehicle segment at Rs 5 lakh crore with over half of the value in mid and full-size SUVs. The Indian automobile industry is valued at USD 108 billion in 2022-23, as per the research. The UVC/UV1 segment which comprises medium size SUVs, has been the fastest growing segment. According to the study, the share of SUV used to be 10 per cent of the market in 2013 and has increased to 38 per cent in 2023. The average price of this segment is Rs 11.9 lakh and the segment is currently contributing to Rs 1,98,000 SUV / MUV crore in value. Giving further insights, the report finds that the full-size SUV consisting of UV2 segment produced 3.83 lakh units and has an average price of Rs 17.7 lakh and contributed to Rs 68,000 crore in value. This represents 13 per cent of the value. There is also the luxury segment consisting of Toyota Fortuner, Mercedes, BMW, Audi and other luxury cars (UC3, UC4, UC5 etc.) which produced 1.6 lakh units with an average price of Rs 39.4 lakh and contributed Rs 63,000 crore in value representing 13 per cent of value share.
Amid the auto industry’s aggressive SUV designs, what makes the EXTER important for Hyundai is the company’s foray into a new territory and a breakaway colour offering. As Unsoo Kim, MD & CEO, HMIL puts it, “With the Hyundai EXTER we are venturing into a new segment that further enhances HMIL’s position as a full range SUV manufacturer.” The company has commenced production of the EXTER from HMIL’s plant in Sriperumbudur near Chennai on 23 June 2023, deploying best manufacturing processes that involve, according to Kim, optimum utilization of industry 4.0 automation, harmonious integration of over 700 4th generation robots, smart inspection techniques to achieve the highest level of quality and durability and a highly skilled HMIL workforce to create superior mobility experiences at HMIL’s state-of-the art production facility.
For manufacturers like Hyundai and Kia, it has become strategically important to bring in a compelling value proposition as competitors line up the roads. The EXTER has a contemporary and unique SUV design, a smart electric sunroof, an inbuilt dashcam with dual camera, parametric front grill and H-Signature LED DRLs. Customer safety is enhanced by 6 airbags (driver, passenger, curtain and side) as standard across all trims and 26 safety features across all variants. Kia Motors which recently unveiled an advanced version of Seltos, is looking to grow the premium mid-SUV segment with the brand that currently contributes 55 per cent to Kia India’s overall sales. Tae-Jin Park, Managing Director and CEO, Kia India feels there is a lot of growth potential in the mid-SUV segment. “This strategic launch is key to our India ambitions of attaining 10 per cent market share soon,” says Park.
While the new turbo 1.5L turbo GDi petrol engine generates 160ps of power and 253 Nm of torque, make Seltos the most powerful mid-SUV in India, Kia has introduced 32 safety features, including the level 2 ADAS with 3 radars and 1 camera. It has also included a dual pane panoramic sunroof and electric parking brake in the new Seltos and a new colour, Pewter Olive. Park shares Kia India’s total sales of about 27,159 units during the first quarter of 2023, with the Seltos continuing to sell an average monthly over 9000 units even when there are multiple new innovations in the segment. To heighten the SUV appeal, Nissan Motor India too is firming up its expansion plans in India by studying the feasibility of two of its most popular global models for the dynamic Indian market and has announced testing of SUV line-up in India for future feasibility. Nissan also achieved the production rollout of the 100,000th Magnite from its Alliance plant (RNAIPL) in Chennai, which reasserts the company’s manufacturing philosophy of “Make-In-India, Make for the World”. The company which has showcased global models X-Trail, Qashqai and Juke in India, is carrying on testing on the X-Trail and Qashqai to assess their suitability for the rapidly evolving Indian consumer base and for the next phase of Nissan in the Indian market. “The Indian market has boundless potential, and it is critical that we introduce the best vehicle line-up to align with what modern Indian consumers want and need,” says Frank Torres, President, Nissan India.
Home brand Mahindra’s iconic SUV Scorpio has achieved a production milestone of 900,000 units for its iconic SUV, the Scorpio, marking a significant achievement for the brand that created the SUV category in India. “With strong demand for the SUV portfolio, we have continued our growth trend with domestic sale of 32,585 units and 22 per cent growth in June 2023. The XUV700 reached an important milestone as it launched in Australia with a high decibel launch,” says Veejay Nakra, President, Automotive Division, M&M. For the month of June ’23, Tata Motors posted wholesales of 47,359 units, a growth of 5 per cent over June ’22 as SUVs continued to be the mainstay, contributing almost 64 per cent of the sales in Q1FY24. “The passenger vehicle industry in Q1 FY24 witnessed robust demand driven by new launches, especially in the SUV segment and EVs,” says Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles.
The race for SUV turf is spreading out of India’s borders. Maruti Suzuki India has initiated exports of its sporty compact SUV, Fronx, with the first batch of 556 vehicles shipped from Mundra, Mumbai and Pipavav Ports to destinations in Latin America, Middle East and Africa. Hisashi Takeuchi, Managing Director & CEO describes the newly launched Fronx as an important model in its portfolio. Aligned to Government of India’s efforts towards Make in India, we are focussed to lead the export of cars manufactured in India. With support from our parent company, Suzuki Motor Corporation, Japan we have expanded our portfolio and are now exporting to more markets,” says Takeuchi.
Going ahead, the going looks good. As per Crisil Ratings, overall PV sales will grow 9-10 per cent on-year next fiscal to 50 lakh units, scaling a new all-time high. Healthy order book driven by pent-up demand and higher incomes, especially of sport utility vehicles (SUVs), and easing availability of semiconductors, will support domestic growth even as export growth remains sluggish, says Crisil.