The change in customer preference towards utility vehicles is becoming evident in the Indian market. With UV segment accounting for one in every four passenger vehicles sold.
This change in trend is also driving competition in the market with more manufacturers launching aggressive products in Utility Vehicle segment. Maruti Suzuki is quickly tapping into the change and poses a serious threat to segment leader Mahindra and Mahindra.
The sales volume of the utility vehicles increased by 37 percent with 4,44,048 units sold between April and October.
The main reason behind this change in trend is the affordability with the launch of compact SUV's in the market. These compact utility vehicles are priced in line with entry level or mid size sedans.
The most of the activities in the automobile is centred around the utility vehicles. The UV segment has witnessed major upsets in market share.
Mahindra is losing its shine in the UV segment. Its market share decreased to 30 percent from 36 percent. Whereas Maruti Suzuki recorded a growth of 25 percent from 14 percent, riding on the success of Vitara Brezza.
Hyundai also witnessed a growth of 13 percent during the period of April to October compared to 10 percent of last year. The Korean automaker sold 83 percent more utility vehicles in the same period.
Senior Group Vice President at rating firm ICRA, Subrata Ray said, "Interestingly, passenger car OEMs like Maruti and Hyundai are able to gain strong footing in the UV segment due to changing preference towards compact UVs."
He added, "Whereas, traditional UV OEMs like Tata Motors and M&M, having presence in chassis built rugged UVs, witnessed market erosion due to relative underperformance of the larger UV segment."