SUV sales in India hit rough weather after a 5 year dream run

The sports utility vehicle (SUV) segment has gained popularity in India very fast. Most of the car brands in the country have  presence in this segment with either a compact SUV or a mid-size SUV as they sell in volumes compares to the expensive full size SUV. Now, after growing steadily for five years this segment has now seen a dip in sales.

2019 Hyundai Creta

The sales for the crossover and utility vehicles have fallen sharply since November 2018. The utility vehicle share in overall passenger vehicle sales is also down marginally. The sale of utility vehicles rebounded in February on the back of MPV segment. The UV segment still remains negative in terms of sales.

According to the report from ETAuto, In 2013-14 only 1 in 5 passenger vehicles sold in India was a utility vehicle. The share increased to 1 in 4 in 2016-17. Last fiscal year it peaked at 28 percent. However the figures from this financial year show a dip and the share is now down to 27.2 percent.

Not just UV segment, the passenger vehicle as a whole was facing a slowdown since November last year. The dip in SUV sales was more evident in them. In fact best selling UVs in the segment like Maruti Suzuki Vitara Brezza and Hyundai Creta were among the hardest hit in December.

Maruti Suzuki Vitara Brezza, which is the best-selling compact SUV, saw sales crash from 14,378 units in November to 9,667 in December, it rebounded to 13,172 units in January. Second spot is occupied by Hyundai Creta which sold 9,677 units in November; 7,631 in December and 10,314 in January.

Some of the industry experts say that both the compact and the mid-sized SUV segments are the most affected ones. These have the maximum number of models and have maximum sales. In the compact SUV segment, sales were down to 1,44,203 from 1,51,141 units Which is 5 percent in the November-February period.

Consumer sentiments, lack of vehicle financing availability and rising vehicle prices could be blamed for this slowdown. Another possible reason behind this slowdown could be the upcoming emission norms. More and more people might waiting for the manufacturers to upgrade their engines to BS VI.

Mahindra & Mahindra president (automotive sector) Rajan Wadhera said,

In December, a call was taken to focus on retail to bring dealer stocks to normal, and this has resulted in low performance. The availability of finance is an issue.