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Competition is heating up in the compact sub-4 meter sports utility vehicle (SUV) segment. Hyundai's newest, and India's first connected SUV, the Hyundai Venue, is reason for the competition. It's launch has forced other manufacturers to offer more incentives to customers, especially during this lean sales period.
Hyundai Motor India, the second largest car manufacturer in the country has received an unprecedented 17,000-plus bookings of its latest SUV Venue, and more importantly, has priced the compact SUV between Rs 6.5 lakh and Rs 11.11 lakh ex-showroom (India), making it the cheapest vehicle available in the sub-4 meter segment.
According to dealers and industry insiders, market leader Maruti Suzuki India is trying to aggressively protect its most successful SUV Vitara Brezza, and is offering a Rs 15,000 cash discount, and additional Rs 15,000 worth of exchange bonus, and a corporate bonus of up to Rs 3,000.
Tata Motors has also done a 'Maruti Suzuki' and is now offering a discount of Rs 15,000 on its diesel and petrol variants of the Nexon, in addition to a Rs 15,000 exchange bonus. Also on offer are corporate discounts of up to Rs 3,000.
Ford Motor is offering cash discounts of Rs 10,000, exchange bonuses of Rs 15,000, and corporate discounts of up to Rs 5,000, for it's EcoSport range. These discounts are being offered in major metros, including Mumbai and Delhi.
Mr Sridhar V, Partner at Grant Thornton India LLP, said, "The way for the competition is to either get a comparable product or more than meet the pricing to retain their market position or even not lose the market share. The first one takes time. The second one is a short-term solution and easy to resort to."
Analysts say that the discounts being offered are not just to counter the Hyundai Venue, but are also being offered to counter the prolonged lean sales phase. Dealers are in a situation where their inventories are more than public demand and they are trying to ease the situation and get products moving.
While the automotive industry as a whole has been experiencing slow and cautious sales, the compact SUV segment is doing really well. As a result of this, original equipment manufacturers (OEMs) are pushing for new launches in the segment, and are offering collective discounts.
Kanika Goyal, Research Analyst, India Ratings & Research, said, "The personal vehicles sales volume declined due to weak buyer sentiments on account of higher insurance premiums, increase in fuel prices as well as interest costs. Sales were also impacted by various regulatory changes in the industry such as BS VI, FAME II as well as alternate mobility. The lack of clarity on the policy front could lead to uncertainty in the demand pattern in fiscal 2020."
Thoughts About The Venue Fueled Price Wars
We all saw this coming. In fact, we know for sure that all manufacturers catering for the sub-4 meter SUV segments were anxious when the Hyundai Venue was being launched. No one knew what Hyundai would price the vehicle at. Hyundai played an ace and priced the Venue at the lowest it possibly could in the segment. Let's see how this offer of discounts turns out!