SUV sales plateau?

The SUV segment, which was racing ahead on the demand speedway, is suddenly stuck in first gear as the honeymoon period seems to have ended with flat growth, or even falling sales.

Models like the Hyundai Creta, Maruti Vitara Brezza, Mahindra Bolero, Renault Duster, Toyota Innova and Ford EcoSport — which collectively powered much of the SUV run for the past three years — are now nearly losing their new-product excitement and facing volume pressure. Data for July, sales of all these models have fallen, pulling down the segment by 9%.

Market leader Maruti witnessed a 5% drop in SUV sales in July. Maruti’s Brezza was down 7% year-on-year. Hyundai’s Creta went flat, while Ford EcoSport was down. Even Mahindra’s Bolero was flat and Toyota’s Innova Crysta saw a 29% drop.

These top four race horses started losing pace from March 2018. Creta went flat in March at 10,011 units (from 10,001 units in March 2017), while Innova was down at 6,952 units (7,252 units in March 2017). However, Brezza at 13,147 units was up 31% and Bolero was up 5% with 9,104 units. Even EcoSport was nearly 15% higher at 5,344 units.

Dealers say some of this growth is due to aggressive wholesale billing as companies pushed to meet fiscal targets. By April, both Brezza and Creta were flat with growth rates of 1.5% and 2% respectively.

They said that most of these products were already 24-36 months old, if not older, and the incremental volumes will now start tapering off. With a host of new products lined up for the market — including compact SUVs from Hyundai, Mahindra and others — sentiment will lift again, feel marketers.

An auto analyst said, “The big difference is coming from first-time buyers who were purchasing these SUVs in urban markets in big numbers. This segment is now turning away and using app cabs, and rural demand is not big enough to make up for the shortfall,” he explained.

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