Globally, demand for SUVs has been on the rise. In India, where smaller cars have long been preferred, SUV sales have notably increased in recent years, challenging conventional trends. This shift can be credited to the attractive features inherent in SUVs, including elevated seating, stylish design, spaciousness, and a commanding road presence. These compelling attributes have successfully captivated discerning consumers, marking a departure from the country’s historical preferences.
Growing SUV trend
The global SUV market is poised for substantial growth, expected to reach USD 1,221.7 billion in 2027 from USD 885.8 billion in 2023, reflecting a steady 6.6% annual increase. In FY2023, SUVs and UVs comprised of 50% of total vehicles sold, with 12 out of the top 25 selling vehicles falling into this category. With a variety of models spanning different price ranges, SUVs meet diverse consumer needs, and their enhanced comfort features solidify their dominance on our dynamic roads.
Changing customer preferences
In India, the growing fondness for SUVs is not only driven by navigating through challenging landscapes but also by aspirational values to own one. SUVs, once perceived as expensive and limited, have gained immense popularity among consumers due to evolving safety regulations and narrowing price gaps within segments. This has largely catalysed the shift in vehicle aspirations towards SUVs, particularly driven by the emerging and more affluent middle class. The socio-economic profile of SUV buyers reflects a desire for vehicles that blend practicality with luxury, embodying a lifestyle that caters to both urban convenience and adventurous pursuits as these vehicles stand out for their higher ground clearance, robust build and their go anywhere capability.
Furthermore, the shift in SUV construction from body-on-frame to monocoque structures has improved handling, ride quality, and safety, while enhanced fuel efficiency and feature richness adds to their appeal. Some manufacturers have competitively priced SUVs against hatches, broadening accessibility. The widespread embrace of SUVs by consumers indicates a lasting trend in the dynamic Indian automotive landscape.
Segmentation of SUVs
The growing buyer enthusiasm has resulted in an abundance of SUV categories in the Indian automotive market. From UVs and SUVs to compact SUVs, from sub compact to micro SUVs – there is something for all kinds of buyers. This diversification has further allowed manufacturers to introduce e-SUVs, combining SUV utility with green powertrain efficiency, appealing to environmentally conscious buyers as well. It has been noted that modern consumers prioritize advanced features like connected car technology, multiple airbags, and panoramic sunroofs – reflecting a significant shift in their preferences over the years. OEMS today have successfully tapped this ‘need-value-aspirational’ bucket by combining utility with car-like comfort features.
Marketing and branding
Marketing and branding have significantly influenced the perception of SUVs, transitioning them from being seen as costly behemoths to being regarded as premium, sophisticated, yet robust vehicles. By targeting the younger demographic with captivating advertisements, innovative social media campaigns and celebrity tie ups, automakers seek to not only sell a product but also endorse an appealing lifestyle.
The Path Forward
The surge in popularity of SUVs in India has been remarkable, showing no signs of slowing down. This heightened demand has put considerable pressure on other segments, particularly hatchbacks and sedans. Manufacturers have strategically positioned their SUVs by understanding consumer needs and desires, emphasizing versatility, customizable features, cutting-edge technology, safety measures, and appealing financing plans. As more SUV models enter the market, the significance of marketing and branding in influencing consumer choices and boosting sales remains paramount for the foreseeable future.
( Disclaimer: Vinay Pant is Head of Marketing at Tata Motors Passenger Vehicles Ltd. Views are personal.)