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Regular-article-logo Monday, 11 August 2025

Buyers prefer SUVs over small cars

New vehicle buyers in the country are increasingly preferring sports utility vehicles (SUVs) over small cars as auto makers launch models at affordable prices with better features.

Jayati Ghose Published 03.10.15, 12:00 AM

New Delhi, Oct. 2: New vehicle buyers in the country are increasingly preferring sports utility vehicles (SUVs) over small cars as auto makers launch models at affordable prices with better features.

In the nine months till September, only 45 per cent of buyers considered a small car, down from 65 per cent in 2012, said Mohit Arora, executive director at JD Power.

During the same period, the customers who bought an SUV went up 12 per cent, he said.

The SUV segment - which recently saw Mahindra & Mahindra launch its first utility vehicle TUV300 with auto gear shift - is expected to witness an entry of about eight new models by early 2016.

The new SUVs, to be launched by Honda, Maruti Suzuki, Volkswagen and Renault, will come in the price range of Rs 6-10 lakh.

The vehicles will have features such as keyless entry, airbags, vehicle stability and anti-lock braking systems.

For the financial year ended March, the sale of SUVs rose 5.3 per cent over the last year. The small-car segment, which includes cars up to 4 metre in length and engine size of up to 1.4 litres, grew 3.4 per cent over the previous fiscal.

"During the past four years, there has been a significant shift in the type of vehicle buyers consider purchasing away from small cars to larger models,"Arora said.

Market leader Maruti Suzuki's domestic sales grew 6.8 per cent last month mainly because of a 6 per cent growth in utility vehicles.

Analysts said passenger car sales might grow around 6-7 per cent this fiscal driven by new models.

"Passenger car volumes still seem to cluster around successful launches," said Kumar Kandaswami, senior director at Deloitte.

Competitive pricing of new models is also prompting buyers to opt for SUVs and compact sedans.

"The price hurdle from one vehicle body type to another was often too large for most to consider. Today, price boundaries separating body types have come closer and many car manufacturers are offering models of different body types straddling the same price point. This has given new buyers a wider range to choose from," Arora said.

M&M's TUV300 starts at Rs 6.90 lakh, while Honda's BR-V is likely to be priced at Rs 10 lakh when it is launched next year. Maruti Suzuki may also launch the XA-Alpha at a price range of Rs 6-8 lakh.

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