India’s largest car maker Maruti Suzuki expects the sport utility vehicle segment to continue outpacing the passenger vehicle market growth and says there is headroom for strong growth till the segment’s share in overall passenger vehicles reaches the 54-55% mark.
Currently, sports utility vehicles account for 48.7% of the total passenger vehicle sales.
“It (SUV growth) should taper around the 54-55% mark, we are a bit away from it. In 2023 it was 48.7%. So this year you could see an upside there. Our research shows it plateauing around 54-55%,” Maruti Suzuki India Senior Executive Officer (Marketing and Sales) Shashank Srivastava told reporters today.
When asked about when the sports utility vehicle share is expected to start tapering, Srivastava said maybe by 2025, depending on how performance is in 2024.
Sports utility vehicles have been driving the passenger vehicle sales growth for some time as strong growth in the segment offset the weakness seen in small cars – hatchbacks and entry-level sedans. In 2023, sales of sports utility vehicles grew around 26%, increasing its share in total passenger vehicle sales to 48.7% from 42% in 2022.
Overall passenger vehicle industry sales during the calendar year 2023 rose 8.3% year on year to 4.11 million. “The industry crossed the 4 million mark for the first time. Also, it was for the first time that SUVs crossed the 2 million mark,” Srivastava said.
The share of hatchback cars in total passenger vehicle sales fell to 30% from 34.8% in 2023 and sedans declined to 9.4% from 11%, while the contribution of multi-purpose vehicles remained the same at 8.7%. With hatchbacks and sedans unlikely to see any major improvement in the share, sports utility vehicle contribution is likely to cross the 50% mark this year.
Meanwhile, the increasing share of sport utility vehicles and top variants along with price hikes on account of higher input costs have resulted in a considerable increase in the average selling price (in ex-showroom price) in the passenger vehicle industry over the last few years.
“As per our calculation of the average selling price in the industry, it has gone up to almost Rs 11.50 lakh in 2023 from Rs 10.58 lakh in 2022. In 2019-2020, the average selling price was only Rs 8.20 lakh in the industry,” Srivastava added.
