Robust sales of compact sports utility vehicles like Maruti Vitara Brezza, Hyundai Creta and Renault Duster are boosting overall passenger vehicle sales in India, while cars sale continue to be in a slow lane, according to a study.
Between April and December of 2016-17, sales volumes of these utility vehicles (UVs) grew by 33 per cent compared to a mere 2.5 per cent for cars, according to an India Ratings and Research (Ind-Ra) report. It said the overall growth rate for passenger vehicles (PVs) stood at 8.6 per cent.
Shifting preferences among buyers for aspirational products such as SUVs and more options in the segment are key contributors to the higher demand for these UVs, the report said. Buyers having earlier opted for larger UVs are migrating towards compact UVs given regulatory challenges. The ban on registration of new large diesel passenger vehicles in the National Capital Region has hurt large diesel UVs in particular, it added.
Additionally, attractive price points and availability of both petrol and diesel variants have also fuelled demand for compact UVs, the report said. Buyers shifting preferences to UVs from cars is evident from the drop in the proportion of car sales in PV segment volumes to 69.3 per cent in April to December 2016 from 73.4 per cent in the corresponding period of the previous year, it added.
The surge in UV sales volumes can in turn be attributed to the success of new compact UV models like Maruti Suzuki India's Vitara Brezza and Creta from Hyundai Motor India. The companies reported 124 per cent and 70.5 per cent year-on-year growth in volumes, respectively, in UV sales in the April-December 2016 period.
In line with the increased volume contribution from UVs, the share of UVs in total domestic PV volumes has risen to almost 25 per cent in April-December 2016 from 21 per cent in the financial year ending 2016, the report said.
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