Even as passenger vehicles (PV) saw one of the steepest sales growth declines in nearly two decades during the recently concluded April-June quarter, four-wheeler buyers are not shying away from newly launched sports utility vehicles (SUVs).
China’s SAIC-owned British automobile brand MG Motor India, one of the newest players in the Indian four-wheeler market, said on Thursday that it has received over 21,000 bookings for the MG Hector, selling out the model for the year and closing its bookings temporarily.
Meanwhile, Korean carmaker Kia Motors disclosed that pre-bookings for its first car for the Indian market, an SUV called Seltos has generated an overwhelming response with a record 6,046 bookings on the first day.
Apart from these two, the newly launched sub-compact SUVs Hyundai Venue and Mahindra XUV300 have helped limit the fall in sales growth for their manufacturers. Hyundai, for instance, managed to keep the fall in sales in single digits at 7.3 per cent in June, primarily due to the demand for the Venue, which sold 8,763 units during the month, becoming the second highest-selling SUV in India after the Maruti Suzuki Vitara Brezza. Similarly, the newly launched XUV300 which sold 4,763 models the last month helped utility vehicle major Mahindra & Mahindra to register a sale growth of four per cent.
However, domestic PV sales declined by 17.54 per cent to 2,25,732 units in June 2019 from 2,73,748 units in the same period last year, according to data released by the Society of Indian Automobile Manufacturers (SIAM). As far as PV makers are concerned, the sale of domestic cars in June 2019 was down 24.07 per cent to 1,39,628 units as against 1,83,885 units in June 2018, while UV sales were down by just 1 per cent to 72,917 units.
One of the important factors responsible for the rise in SUV sales is the number of new launches in the segment, according to experts.“At present, we have new options from Rs 6.50 lakh priced sub-compact Hyundai Venue to Rs 13 lakh priced mid-sized SUV Tata Harrier. The SUVs which are doing well in the market are priced very aggressively and come with a host of connected features. Buyers who were looking for sub-Rs 10 lakh vehicles are now upgrading to SUVs,” said Puneet Gupta, associate director at IHS Markit.
The SUV market will continue to grow in future in the wake of new launches, but the growth rate would be slightly lower than anticipated previously, he added. To meet the increasing demand for its first four-wheeler, MG Motor India said it has plans to increase the production capacity for Hector at its Halol manufacturing unit to 3,000 units per month by October this year. It will also announce when bookings will be re-opened soon.
“We are also working with our component suppliers to ramp up production in a gradual manner without any compromise on quality,” said Rajeev Chaba, president and MD, MG Motor India. The top 2 variants Smart and Sharp have registered the highest demand, with over 50 per cent registrations for the petrol variant.
Meanwhile, reacting to a large number of bookings received for Kia Motors’ soon-to-be-released Seltos, Manohar Bhat, VP, Kia Motors India said, “Getting such an overwhelming response from customers across 160 cities where we are present, makes us elated… Our mid-SUV Seltos is BSVI compliant from day 1 and is available in both petrol and diesel versions, with both manual and automatic options in all power trains, it makes it an attractive proposition.”
He added: “We are committed to the Indian market and to delivering the best and class-leading products. With our most modern automotive plant having 3 lakh capacity, we are fully prepared to make timely deliveries and uphold the trust our customers have shown in us.” The Seltos will be launched in India on August 22 and bookings are currently being accepted for Rs 25,000.
New launches boost Hyundai, Mahindra’s PV market share
The downturn in demand might have resulted in the country’s leading four-wheeler maker Maruti Suzuki losing passenger vehicle (PV) market share but rivals Hyundai India and Mahindra and Mahindra have managed to increase their shares on the backs of new launches, particularly in the Utility Vehicles (UV) segment.
According to data available, Maruti’s market share in the PV segment has come down from 52.54 per cent to 51 per cent in the April-June period. The carmaker has registered a double digit fall in domestic PV sales in the past few months.
Hyundai Motor India, the second-largest PV maker in India, however, registered almost 2 per cent increase in the market share to 17.75 per cent in the recently concluded quarter despite its Q1 sales falling by 7.7 per cent year-on-year, to 1,26,514 units. The Korean carmaker benefitted immensely from the newly launched Venue which also increased its UV market share from 13.63 per cent in Q1 FY2019 to 19.60 per cent now.
Mahindra, which had three back-to-back launches, saw an increase in its PV market share from 6.93 per cent to 8.34 per cent in Q1, according to the data. The company saw its UV market share grow 1.14 basis points to 25.02 per cent, compared to 23.87 per cent a year ago.