Indian car buyers shifting to SUVs, high-tech features

India's romance with SUVs is intensifying ever so fast and automakers are fuelling the affair even further, having launched 36 such models in the last five years.

Such is the craze for SUVs at present that waiting periods for some of the most popular models are stretching to over two years, and fresh orders are still flowing in.

Car buyers are now willing to spend more on their personal mode of travel and are preferring top-end variants which come loaded with features like sunroof and connected technologies.

In a market where hatchbacks used to dominate the sales charts, it is the entry-level and mid-sized sports utility vehicles (SUVs) which are growing in popularity, leading to more and more product launches in the segment.

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"The SUV segment has seen a major growth in the last few years. The SUV segment's contribution, which was around 19 per cent of the industry, has now gone up to 40 per cent in 2021-22 and we see it growing further," Maruti Suzuki India Senior Executive Director (Sales and Marketing) Shashank Srivastava told PTI.

One of the reasons for the growth of this segment has been customers' liking for vehicles with high stance and road visibility, he added.

With increase in demand, the entry-level SUV segment became the largest in the domestic passenger vehicle market last fiscal, overtaking the premium hatchback vertical which has dominated the market since 2011.

Out of 30.68 lakh volumes last year, the entry-level SUVs' share stood at 6.52 lakh units.

It is no surprise either that the maximum model launches in the last five years in the entire passenger vehicle segment have been in the compact and mid-level SUV space.

"Also, the new age millennials are preferring to buy high-end variants which come equipped with several comfort and convenience features. Preference for feature loaded cars has gone up from 17 per cent in 2016-17 to 24 per cent in 2021-22. In some of our models, like the recently unveiled Breeza, the top variants account for 70 per cent of bookings," Srivastava noted.

Studies show that the spending would further increase now and people are willing to spend more, he said.

Tata Motors Passenger Vehicles Managing Director Shailesh Chandra said differentiated design, evolving lifestyles, shift from public to personal transport as a result of the pandemic, growing awareness of safety and convenience features, among others, are some of the factors that are driving growth in the passenger vehicles market.

"Customers today know exactly what they desire and we constantly strive to provide them with the same through our range, which is refreshed in short intervals, be it in terms of features, variants or brand new products," he stated.

Chandra said the company's strong comeback in FY21, reclaiming third position in terms of volumes and being a challenger brand, has been on the back of unleashing the full potential of new range of cars and SUVs, which have been developed after studying the market in depth and understanding evolving customer needs.

Kia India Chief Sales Officer Myung-sik Sohn said the increasing demand for SUVs among Indian customers clearly shows a strong preference towards bold, stylish vehicles with a tall stance.

"We launched the Carens earlier this year and have already sold more than 30,000 units in less than five months," he added.

Another trend which the company is observing is that more and more customers are buying the top-end variants of cars, Sohn noted. "In fact, 47 per cent of the total Kias sold in India are top trims and this shows that customers today demand nothing but the best."

Connected features are something that customers today want in their cars and Kia now has more than two lakh connected cars on Indian roads with an activation rate of 97 per cent, Sohn said.

Further, the modern digital savvy customer is increasingly scouting for the entire experience of owning a car with minimal physical contact, he added.

Toyota Kirloskar Motor Associate Vice President (Sales and Strategic Marketing) Atul Sood said the rapid pace of urbanisation and economic development is contributing to the demand for SUVs.

There are quite a number of models already available in the segment in response to the demand, thus making SUVs one of the strongest line-ups in the car market today, he pointed out.

Sood noted that new launches and product refreshments always bring in excitement and added interest among customers.

"We at Toyota have received an overwhelming response for all our new offerings, including the new Camry Hybrid and the new Glanza," he said.