Despite having Fiat brand - a household name in India since decades - Fiat Chrysler Automobiles(FCA) was struggling to find its way in the country. Then came the launch of Jeep Compass in July last year. With the Jeep Compass, FCA India secured its best sales within a 12-month period, in the last 10 years. FCA is not the only company whose fortunes have changed with a
sport utility vehicle (SUV) launch. Companies such as Ford (with EcoSports), Renault (with Duster), etc created a buzz in the market when they launched their SUVs with customer-friendly features and are still riding on the success wave generated by these brands.India is not alone to be swept by the SUV wave in the world. It started inthe US in the 1990s, spread to Europe and China next and, more recently, to developing countries like India and Brazil. Since FY11, the SUV market in India has emerged as a strong sub-segment. In FY18, the market accounted for around 28 per cent of the total passenger vehicle sales volumes compared to just 13 per cent in FY11. In FY18, the SUV segment also recorded a robust growth of 21 per cent, which was much higher compared to the overall passenger vehicles sales growth of 8 per cent.As families grew, the demand for space, comfort and functionality increased among consumers. Strong body architecture, higher seating position and relatively larger cabin space make SUVs ideal for Indian roads. The
overall appeal, sophisticated to aggressive design, higher ground clearance,powerful engine options and off-road capabilities are attracting consumers towards SUV segment.
While SUVs in the Rs 15-25 lakh category saw a booming 135 per cent growth, the volume growth came from the compact SUV segment (less than 4 m). Earlier, SUVs, a highly aspirational product for any consumer, were very expensive. With the entry of affordable options in the recent years, sales of SUVs have been rising continuously. Models such as Maruti’s Brezza and Ford’s Eco Sport priced under Rs 10 lakh have enabled many people to fulfill their dreams to own a SUV. This is the reason why compact, affordable SUVs are driving the volume in this segment. The SUV market in India is likely to double to 1.6 million units by 2022, driven mostly by compact sized SUVs.BS VI emission norms, which will be implemented from April 2020,could play a spoilsport to this party. The BS VI norms is likely to further increase the price gap between a diesel and petrol variant, which currently stands at around Rs one lakh, making the diesel variant less attractive. At present, diesel is the preferred choice for SUVs. This could pose some threat to the sales growth of SUV. Taking cognizance of this fact, OEMs are now increasingly launching their new models in both petrol and diesel variants.With petrol variants being as efficient as the diesel ones, this may help them