If the passenger vehicle segment has been able to achieve sustained growth over the past year, it is thanks to the utility vehicle (UV) market. Surging demand for SUVs has seen this segment provide a fillip to PV numbers as also for overall industry sales. Demand is such that today, every fourth PV sold in India today is an SUV. Briefly put, UVs have eaten into the overall PV market and look to further accelerate their pace of growth.
In the April-May 2017 period, a total of 140,551 UVs were sold (+16.19%), which along with passenger cars (357,419 / +11.15%) and vans (31,290 / 0.37%), helped the PV segment post 11.73 percent YoY growth at 529,259 units.
The popularity of SUVs continued to surge – led by the Maruti Vitara Brezza – which was the highest selling utility vehicle in May with 12,375 units, its best-ever monthly tally yet and 5,182 units up on its May 2016 sales of 7,193 units. The Brezza commands a waiting period of around five months with higher trims having an even longer waiting period at some dealerships.
As in April, the Hyundai Creta clinched the second position in May with sales of 8,377 units. The SUV has contributed handsomely to Hyundai's volumes and continues to remain hugely popular. In fact, the Korean carmaker expanded the Creta SUV range with the introduction of three new variants in early April. Additionally, it also updated the SUV's 7.0-inch touchscreen infotainment system with Apple CarPlay, Android Auto, and MirrorLink connectivity.
At No. 3 is Maruti's Ertiga which drives into the Top 5 list with sales of 7,121 units. Sales of the MPV have gained pace in the last few months and the model also entered the Top 10 passenger vehicle list in May 2017.
At No. 4 position is the Mahindra Bolero which continues to soldier along. Last month, the company sold 6,832 units, 2,413 units more than it did a year ago. With all indications of a bountiful monsoon, demand for the Bolero should rise in the coming months. The Bolero has also breasted past the Toyota Innova Crysta, which sold 5,643 units and is No. 5 on the best-selling UVs list.
Interestingly, the Crysta has generated the highest revenue of any car model in India in the previous fiscal. It is estimated to have generated Rs 13,445 crore for Toyota in 2016-17, according to the carmaker. The company recently expanded its Innova Crysta line-up with the launch of the new rugged-looking Touring Sport.
Maruti grabs UV market share from Mahindra
In the market share analysis for the month, thanks to the overwhelming demand for the Vitara Brezza, Maruti is now the leader in the UV sales space with a 30.77 percent share compared to longstanding leader’s Mahindra & Mahindra’s 26.82 percent. Over the past year, India’s largest automobile maker has seen its UV share grow from 24.50 percent to 30.77 percent while M&M’s share has dropped from 33.18 percent to 26.82 percent.
For the April-May 2017 period, Maruti has sold a total of 42,246 UVs compared to Mahindra's 37,694 units. Interestingly, this also reveals how the UV share in growing in Maruti's sales. UVs accounted for 15.76 percent of Maruti's total sales of 274,329 units.
Hyundai Motor India, thanks mainly to the Creta, has retained its UV market share, growing marginally from 12.41 percent in April-May 2016 to 12.68 percent in April-May 2017.
For Toyota Kirloskar Motor, the Innova Crysta and the new Fortuner has helped it grow market share from 10.46 percent to 11.71 percent.
Future outlook for UV market
The coming months are set to see a spike in UV sales which will be a result of GST coming into effect from July 1 and pent-up demand from delayed purchase decisions as a result of buyers awaiting sizeable relief in prices following implementation of GST.
Large SUVs are likely to see a decline in prices after the implementation of the Goods & Service Tax in the country. This is because luxury cars and SUVs (engines larger than 1,500cc) see a considerable reduction in indirect taxes from an earlier 50 percent to 43 percent (GST of 28 percent plus cess of 15 percent). Meanwhile, prices of midsize cars and SUVs (length more than four metres, engines smaller than 1,500cc) are likely to remain more or less unchanged as their tax incidence with a net rate of 43 percent.
Top 10 Passenger Vehicles – May 2017
Top 10 Passenger Cars – May 2017
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Top 10 Two-Wheelers – May 2017