SUVs toast of nation, driving PV sales growth: Hyundai
"So it can be seen very clearly that still the SUVs are the toast of the nation even after the GST rate cut. This is the real story. Actually it is the SUV mid large segment, which has seen maximum growth"
image for illustrative purpose
New Delhi: Sports utility vehicles are driving the growth of the domestic passenger vehicle segment with customers looking to upgrade to bigger cars rather than downgrade to smaller ones due to reduced prices post GST rate cut, according to a top Hyundai Motor India executive.
The company, which introduced an all-new version of its compact SUV Venue on Tuesday, said hatchbacks and sedans are part of the overall product mix, but are no longer the driving force behind the 43 lakh-unit-a-year domestic passenger vehicle segment. Last week, Maruti Suzuki Chairman R C Bhargava stated that the GST rate reduction has sparked the revival of small cars, proving wrong the perception that Indian consumers have moved up to aspirational and bigger segments, and some of the car manufacturers are expected to revise their product mix. Hyundai Motor India Chief Operating Officer Tarun Garg, who is set to take over as the Managing Director and CEO from January next year, cited data to note that it is the SUV sales which have grown post the GST rate rejig.
In the January-August period this year, the share of hatchbacks in the overall passenger vehicles sales stood at 22.4 per cent, he stated.
The share dropped to 20 per cent in October, he added. On the other hand, the share of SUVs in the overall passenger vehicle sales has grown in the similar period, Garg said. "So it can be seen very clearly that still the SUVs are the toast of the nation even after the GST rate cut. This is the real story. Actually it is the SUV mid large segment, which has seen maximum growth," he noted.
Garg stated that increasingly the Indian customer is upgrading to compact SUVs rather than downgrading to small cars. "The customer has the same amount of money as before, and now, he can buy a bigger car with the same amount," Garg stated.
He noted that as a full stack vehicle manufacturer, the company would continue to sell entry level cars and sedans as the segment, though curtailed, remains significant in the 43 lakh domestic passenger vehicle industry.
Garg stated that SUVs now account for 71 per cent of the overall Hyundai Motor India sales. The contribution can touch 80 per cent by 2030, he added. Garg noted that the compact SUV segment, where Venue competes with the likes of Maruti Brezza, Tata Nexon and Kia Sonet, continues to grow with customers upgrading from small cars. "The segment was around 80,000 units from January to August and grew to around 94,000 units in September and October. The GST tax benefits for small SUVs are significant with 13 per cent and 11 per cent tax reduction in diesel and petrol trims," he said.
He noted that the contribution of compact SUVs in the overall SUV segment is currently pegged at around 41 per cent. The SUV segment currently accounts for57 per cent of the overall PV sales.
