January 20, 2022

The World Live Breaking News Coverage & Updates IN ENGLISH

The World Live Breaking News Coverage & Updates IN ENGLISH

Hatchbacks fend off SUV surge but sedans lose big time

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Hatchbacks fend off SUV surge but sedans lose big time
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Hatchbacks fend off SUV surge but sedans lose big time

Four out of India’s top-selling cars are presently hatchbacks but with the definition of SUVs changing significantly in the last few years the availability of the SUV body style has grown across price segments. Today, one can get a SUVish vehicle under Rs 10 lakh. It’s a commonly known fact that hatchbacks have traditionally been the largest selling segment in the country along with sedans. However, with SUVs growing at a rapid pace it’s clear that this growth has to come at the cost of other segments. In order to find out the actual dynamics of vehicle sales in the country we spoke to Shashank Srivastava, Executive Director, Marketing & Sales, Maruti Suzuki India Limited.
Kickstarting the conversation, Srivastava said that SUVs are growing at a healthy pace and that about five years back they accounted for about 15 % of the total sales. Fast forward to present and in FY 20-21 SUVs grew to 32 % of the market and 38 % in CY 2021. At an impressive CAGR of more than 13 % SUVs grew faster than any other segment in India over the last few years, he added. That said, this growth hasn’t come at the cost of hatchbacks as Srivastava told us that their market share has been consistent since FY 2014-15. In the said year, hatchbacks accounted for about 47 % of the market and in FY 20-21 their share remained almost unchanged at 46.3 %.

Hatchbacks fend off SUV surge but sedans lose big time

Speaking about growth, Srivastava admitted that the segment hasn’t been able to grow but has held onto its share of the pie despite the SUV onslaught due to 50 % of customers being first-time buyers and about 60 % of them preferring hatchbacks.
Within the hatchback space though there has been an equal split between entry-level and premium hatchbacks. Interestingly, this split has been consistent since 2010-11 when premium hatchbacks accounted for half of the segment. He added that going forward a higher potential is seen in the segment of cars such as the Baleno as customers now demand more features in their first car.
With the growing SUV segment and rock-steady hatchbacks the discussion’s focus shifted to sedans and this is where Srivastava highlighted the major decline that has taken place. From commanding 24 % of the market in 2014-15, sedans have now shrunk to a shade under 9.5 %, translating into a huge decline.
Speaking about the future trends, Srivastava said that SUVs will continue to grow till they reach about 45 % market share, which is where we might see them plateauing. Responding to the future of hatchbacks, he said that while the segment is expected to enjoy strong consumer demand, tightening regulations might increase the cost of these cars disproportionately. This in turn might lead to a contraction of the segment in the long run as first-time buyers are more sensitive towards the purchase price of a vehicle.
Srivastava concluded the conversation by saying that Maruti Suzuki is betting strongly on the hatchback segment as it is still the largest in the country and will continue to hold the leading spot for some time. He said that the reception for the new Celerio has been positive as the company registered 8,000 + retail deliveries for the new model in its first full month of sales in December 2021. In contrast, the previous Celerio’s peak sales were about 8,000 units per month during its lifecycle. One should also consider that the present model doesn’t have a CNG variant, which is due to be launched this month and will add further to the numbers, he disclosed.

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