SUVs — New, Hot, & Happeni

The skyline of the Indian automobile industry is dotted with many names of late. If you stand on any rooftop in an average Indian city, you are sure to see a cavalcade of vehicles, each of whose makers are headquartered anywhere between Bavaria and Seoul.

As this industry has grown dramatically in the past decade and a half and is poised to take India to a position of the next superpower for automobiles, newer sub-trends and segments are becoming discernible. Of these, a prominent one has been that of multi utility vehicles (MUVs) and sports utility vehicles (SUVs) in particular, although this segment took some time to kick off.

The growth of this particular segment is perhaps a logical outcome of the burgeoning upper middle class, as it is considered a lifestyle product. Among the estimated 300 million or so people who make the teeming middle class population, the profile these manufacturers have narrowed down for SUV’s is the 35-55 age group that is upwardly mobile and has been quite a globetrotter.

Carmakers estimate that typically, these buyers would have owned a car for some time, and would be looking for this type of a vehicle as a second buy. This is a vehicle that is used primarily to take the family out for long drives. This last aspect makes this segment a highly narrowed one, because the idea of taking off for vacations and long weekend rides is just about beginning to catch up in India, as compared to developed economies.

While there are a good number of carmakers in India, not all of them are keen or ready to enter this particularly specialized segment. Currently, there are no more than a handful of big players that make SUV’s – Ford, Honda, Hyundai, Suzuki, and Chevrolet are the names that come to mind among foreign companies, while Tata and Mahindra are the leading SUV makers among Indian manufacturers. One of the important factors that make the entry into the fray challenging is that SUV customers are generally well-traveled and aware of automobile brands from around the world. Another factor is the price. An overwhelmingly huge percentage of the brands are priced between 13 and 23 Lakh, a sum most Indians would think twice about before spending on a second car for the family.

Having said this, it needs to be borne in mind that this is still very much an expanding market. It is in the process of evolving and it is difficult to predict major trends for the distant future. One thing is certain – it has seen a notable growth in percentage in the last few years. Yet, this market size, even after what has been termed as an exponential growth, is puny by European and American, or even Indonesian standards. Despite the much touted expansion of the market, we are still talking about figures that run into the lower thousands annually. So, are figures like these enough to encourage big names to enter the bandwagon and claim a piece of the pie?

It is the expected growth that is making these big names think about concentrating on this segment. Although no one can say with certainty what the market size is going to be in the next 5-10 years, everyone is looking for an expanded market.

The expansion of the automobile industry in general depends heavily on increased income levels, which is cited as key for the expansion of this particular segment, but it is difficult to say how long this trend will sustain. The major consolation for most players is that the market for small cars had also got off to a slow start, and that SUV’s would pick up as more choices are offered to buyers at lower prices. For the time being, one of the prime factors driving people to the purchase of an SUV is the legacy of the manufacturer. Maybe, in the not so distant future, glancing from the same rooftop, you will see more SUVs than other cars in the parade of vehicles.

Source:-Carzoo.com