Indian Car Buyers Lapping Up SUVs, High-Tech Features Like Never Before

A market shift means that consumers are willing to spend more to get the right features.

Indian Car Buyers Lapping Up SUVs, High-Tech Features Like Never Before

Photo Credit: Tata Motors

The Tata Nexon EV Max is claimed to charge from zero to 80 percent in 56 minutes

  • SUVs are becoming more popular due to their driving stance
  • Younger buyers are interested in Internet-connected features
  • Auto manufacturers are adapting to this shift in demand

India's romance with SUVs is intensifying and automakers are fuelling the affair, 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 that come loaded with features such as a sunroof and connected technologies.

In India, where hatchbacks used to dominate the sales charts, entry-level and mid-sized sports utility vehicles (SUVs) are are growing in popularity, leading to more and more product launches in the segment. "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 a high stance and better road visibility, he added. With this 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 units last year, the entry-level SUVs' share stood at 6.52 lakh units. It is also no surprise that the largest number of model launches in the last five years in the entire passenger vehicle segment has 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 Brezza, the top variants account for 70 per cent of bookings," Srivastava noted.

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

Tata Motors Passenger Vehicles Managing Director Shailesh Chandra said differentiated design, evolving lifestyles, a shift from public to personal transport as a result of the pandemic, and a growing awareness of safety and convenience features 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 the third position in terms of volumes and being a challenger brand, has been thanks to a 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 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." Customers today want connected features in their cars, and Kia now has more than two lakh connected cars on Indian roads with an activation rate of 97 percent, 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. Quite a number of models are already available in the segment in response to demand, thus making SUVs one of the strongest lineups 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.


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Further reading: Maruti Suzuki, Toyota, Kia
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