Big-ticket SUV launches drive a new pecking order

Big-ticket launches in the sports utility vehicle (SUV) segment last year have created a new pecking order of manufacturers. New launches, including Hyundai's Creta, and Maruti Suzuki's S-Cross and Vitara Brezza have helped the two carmakers strengthen their position to move up in the ranking. Japanese carmaker Toyota has slipped to the third slot, vacating the second position for Maruti. Both Ford and Renault have moved down.

The utility vehicle (UV) market, which includes SUV andmulti-purpose vehicles, grew to a record 586,664 units in FY16. However, the pecking order has been unsettled. While Mahindra & Mahindra remains the largest player, commanding a market share of 38 per cent, the second, fourth and fifth largest players of FY15 have been pushed down in the rankings.

India's largest carmaker, Maruti Suzuki, is now also the second largest UV player after Mahindra, thanks to the growing sales of Ertiga and addition of volumes from two new products - S-Cross and Brezza. The company sold around 60,000 units of Ertiga last year. Launched in August last year, S-Cross added 20,000 to the volume, while 5,500 units of Brezza were sold in March, the first month of its launch. Maruti is likely to stay at the second spot this year, too, as it will be the first full year after the Brezza launch.

"New models like S-Cross and Brezza helped us strengthen our presence in the UV segment. We are upbeat on FY17 when we will have Brezza and S-Cross for the full year. In addition, our well-accepted Ertiga is now even more popular after we introduced the mild hybrid variant last year," said R S Kalsi, executive director (marketing and sales) at Maruti.

Big-ticket SUV launches drive a new pecking order South Korean automobile major Hyundai, which had a negligible presence in the UV space, took the segment by surprise when it launched Creta, an SUV in July last year. From being a marginal player, the company has quickly moved up to the fourth slot. Hyundai sold nearly 64,000 Creta in the domestic market in just about eight months. A full year of Creta sales could push Hyundai up to the third slot if Toyota's sales decline is not arrested.

"The Indian geography with challenges of road infrastructure presents a big opportunity for SUVs. Hyundai filled up a vacant position by launching Creta with a strong-build quality and modern premium design that made it the highest-sold SUV in India. We are looking to further strengthen our range. In addition to Creta and Santa Fe, two new SUVs - Tucson (positioned above Creta) and Concept HD-14 (positioned below Creta) - are being developed," said Rakesh Srivastava, senior vice-president (sales and marketing) at Hyundai Motor India.

Toyota has slipped to the third position, primarily impacted by the Supreme Court ban (imposed in mid-December 2015) on sale of diesel vehicles with an engine capacity of 2,000cc and above in a large market such as the national capital region (NCR). It was not that Toyota's UV numbers were growing earlier. In the April-November period, its UV sales had dipped nearly four per cent. The decline was accentuated with the ban. In the full financial year, its UV sales slipped 14 per cent and its market share shrunk. The company said three per cent of its annual sales was lost due to the NCR ban in the first three months of 2016 (calendar year). Its two popular UVs - Fortuner and Innova - have not been sold in the NCR for the past four months.

Mahindra launched two new SUVs last year - TUV300 and KUV100 - which helped the company hold on to its market share in spite of a sluggish rural demand and the diesel ban in NCR, which impacted the company for a month. Mahindra came up with a 1,990cc diesel engine for its popular SUVs such as Scorpio and XUV500 for the NCR market. Mahindra, unlike Maruti and Hyundai, is primarily a utility vehicle maker.

Ford and Renault, well known for their SUVs EcoSport and Duster, had to re-launch a facelift version last year to sustain volumes. That strategy did not work and both faced the heat from new launches. Ford was driven to cut EcoSport prices by up to Rs 1,12,300 a week after the Brezza launch in March. Renault is down to the sixth spot from the fifth in FY15.