Weathering slowdown: SUVs are automakers' vehicle of hope


    Weathering slowdown in a market down by 10%, bookings for new models shoot up.

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    New launches of MG Hector, Hyundai Venue, Kia Seltos, Mahindra XUV 300 and Tata Harrier have been greeted with enthusiasm by prospective customers.
    MUMBAI: There may be a silver lining in the dark cloud that is the auto industry — the sports utility vehicle (SUV). Indian buyers have been lining up for SUVs, making 100,000 to 150,000 bookings.

    And while carmakers have seen a 10% market decline between January and June this year, SUV sales have shrunk by a much more modest 1.8%.

    New launches of MG Hector, Hyundai Venue, Kia Seltos, Mahindra XUV 300 and Tata Harrier have been greeted with enthusiasm by prospective customers.

    Kia got 6,000 orders on the day it opened bookings for Seltos. MG Motors has already secured 21,000 bookings for Hector, and has stopped accepting orders for this year. Hyundai has so far received over 50,000 bookings for Venue and some variants of Creta that were launched earlier. Mahindra & Mahindra has received over 35,000 bookings for XUV 300. And including the company’s Marazzo and Alturas, which were launched earlier, M&M’s total bookings add up to 70,000 units.


    The caveat here is that not all bookings, which require small sums of money, translate into final purchases. But industry insiders said customer enthusiasm was still exceptional in current conditions.

    Rajeev Chaba, president of MG Motor, India, said Hector had received an overwhelming response. The company, he said, was unable to cater to such high initial demand and hence had closed bookings temporarily. This was to ensure timely deliveries to customers, Chaba added. MG Motor plans to increase the production of Hector at its Halol plant to 3,000 units per month by October.

    SUVs are gaining both prominence and market share. Seven out of 10 new vehicles launched in India in the past year or so have been SUVs. And SUVs’ share in the Indian market has gone up to 24% in January-June 2019, compared with 22% in the year-ago period. Vikas Jain, national sales head at Hyundai Motor India, said the “new technology features in these new-age SUVs” have been appreciated by customers even in a slowing market.

    “Of the 20,000 units of Venue retailed so far, more than 55% have telematics features. On an average, SUV price realisation has gone up by Rs 80,000-90,000. Yet, customers are willing to wait and pay for it,” added Jain. Gaurav Vangaal, country lead for production forecasting at IHS Markit, said new entrants such as Kia and MG Motor are set to shake up the Indian SUV market as their focus is on utility vehicles.

    “Newcomers are wary of competitive intensity in the mainstream car market and have steered clear of it. Both Kia and MG know … for them to make a mark in this market, they will have to play on technology and value. Going by the pricing of Hector and indicative pricing of Seltos, they are hitting a sweet spot for car upgraders,” added Vangaal.
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    9 Comments on this Story

    BhaRgaVgiri Gosai393 days ago
    I don''t understand why number of SUVs are increasing, also people are ready to pay 80,000â ¹ more! seriously why?
    Do we Indians are really in need of SUVs?
    Why can''t we drive small cars?
    Chowkidhaar 393 days ago
    Eventually the indian Auto sector will fall in the hands of Chinese Firms thanks to Modi''s reckless policies on electrification.
    sharmila mehendale393 days ago
    Around budget times, a lot of criticism was seen about the slow down in the automobile sales. Doomsday predictions for the Indian economy were also seen. The sane voice at that time was Anand Mahindra, who said the slowdown was transient. And the booming response to SUV bookings should definitely be a welcome step in revival of sales.
    The Economic Times