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SUVs are the next big battleground for carmakers in India

After small cars, large hatchbacks and small sedans, SUVs are the next big battleground for carmakers. Curiously their weapon of choice is design.

business Updated: Feb 15, 2016 13:47 IST
Suveen Sinha
The Vitara Brezza SUV was Maruti’s biggest new product at the Auto Expo 2016.
The Vitara Brezza SUV was Maruti’s biggest new product at the Auto Expo 2016.(Mohd. Zakir/HT Photo)

At first, Rakesh Srivastava does not fall for the bait. The irrepressible head of Hyundai’s sales and marketing in India won’t be drawn into a comment on Maruti Suzuki India’s recent claims of setting the agenda in technology, safety, and styling.

The point was made to provoke Srivastava, which usually brings out the best in him. What adds to the edge is that Srivastava worked at Maruti in the late 1990s, when the company largely chased the agenda set by Hyundai.

But it’s not long before Srivastava starts to speak about his current employer Hyundai’s superiority over rivals. “Right from the beginning, Hyundai has been known for its feature-rich vehicles, giving more for less. That’s why the Hyundai brand is aspirational.”

Much of Srivastava’s confidence comes from Hyundai’s focus on two markets at all times, one the “mainstay”, and the other “emerging”. Hyundai began its journey in the country in 1998 with a small car, the Santro, as the mainstay. Soon it would also focus on the emerging market for sedans, and bring in the Accent. This later changed to small cars and sedans as the mainstay and premium hatchbacks (i10 Grand, i20) as emerging. Now the premium hatchbacks and sedans are the mainstay and sports utility vehicles (SUVs) the emerging.

Carmakers seek UV protection

Hyundai’s emerging segment is the one everyone else, too, is salivating over. Never was it more evident than at the Auto Expo that just ended. Utility vehicles – SUVs, crossovers, and people carriers – dominated the show. Hatchbacks made their presence felt only in a small measure, through Tata Motors Zika, which got bitten by the Zika virus and is looking for a new name; Volkswagen’s Polo GTI, which may be priced to high to shake up the market; and the automatic version of Renault’s Kwid. Small sedans — less than four metres in length and therefore entitled to lower taxes than the big ones — were a more sizeable presence, but this market seems to have peaked. UVs, on the other hand, are taking off.

The passenger car market has been sluggish for a while, more so if you take out Maruti, which has come to corner 47% of this market, and that of Hyundai, the number two. For the others, the picture is not so rosy, unless you look at UVs.

Their share of the passenger car market has grown steadily to nearly 21.5%, from less than 13% four years ago.

Maruti blew the war bugle by showing its small SUV, the Vitara Brezza, at the Auto Expo. It follows the much softer note sounded by the S-Cross, a crossover. The Brezza could be Maruti’s first real shot at the SUV market. Other companies, too, joined the UV show, but the real battle, as in the passenger car market, may be fought between Maruti and Hyundai.

Here, Hyundai may have the upper hand for now. The Santa Fe established Hyundai’s credibility as a maker of true SUVs. The concept HND14, now called Carlino, will address the sub-`10 lakh small SUV market, the one the Brezza eyes. The Tucson will plug the gap in the `17-24 lakh range, which has not had a contender since Toyota raised Fortuner’s price. The i20 Active, the crossover variant of the i20, is dotting the roads.

Srivastava’s pride and joy, though, is Hyundai’s new compact SUV, the Creta, which seems to be wiping the floor with Maruti’s S-Cross. Interestingly, the SUV and the crossover should never have been seen as direct rivals. But carmakers themselves are to blame for such cases of mistaken identity.

More utility than sports

As a senior Maruti executive explains, it’s a design play. Many of the vehicles strutting as SUVs are mere urban cowboys, with little off-road credentials. But the Indian buyer, unmindful of such distinctions, is fawning over them. With their aggressive stance, better visibility for the driver, more space, and more comfort during long journeys, the new SUVs present an irresistible case to the value-conscious mind. Even Renault’s Kwid, meant to rival Maruti’s Alto, is selling because it is styled like a SUV. It doesn’t hurt that the new UVs are sophisticated enough to appeal even to the woman driver.

Where does that leave Mahindra & Mahindra, the maker of scruffy road warriors such as the Bolero, and the non-metro politicians’ favourite, the Scorpio? “Today’s SUVs are becoming more car-like,” says executive director Pawan Goenka. “But Mahindra retains the upright design, too.”

So it does, as seen in the TUV 3OO. But the more recent launch of the KUV1OO shows M&M has agreed to play the design game. The small SUV is less tall than the Wagon R. And its initials apparently expand to Kool Utility Vehicle. Enough said.