UV market News: India UV market share to increase to 51-53% soon from around 39% in FY21: Report
Research by CRISIL shows that the share of UVs in the overall domestic passenger vehicle (PV) segment increased to 48% in the 9MFY22 from 15% about two decades ago (FY02), around 3,300 bps rise.
And as such, CRISIL has now forecast that UVs will outperform other segments in the market between FY21 and FY26 and will log a CAGR of 14-18%, while small cars may grow 4-6%. Further, it also expects the share of the UV market to increase gradually to 51-53% in FY26 from around 39% growth seen in FY21.
In fact, the other segments have already begun eating away the share of small cars in the Indian market. Back in FY12, the share of small cars stood at 65% while in the first nine months of the ongoing fiscal, its share stood at 45%.
CRISIL’s research has shown that between FY09 and FY19, the small car segment logged a CAGR of 7% while UVs logged a CAGR of 16%. “While a part of this growth is due to a low-base effect, the entry of new players and launch of new models have also pushed the change in consumer bent,” the report says.
UV growth has pulled ahead in the past decade (Graph source: CRISIL)
The increase in the variety of models has played a significant role in the adoption of UV as an option in the Indian market. Figure this – back in FY02, the UV market had six players and eleven models. These included Maruti Suzuki (Gypsy), Mahindra & Mahindra (Bolero and Scorpio), Toyota (Qualis, Innova and Prado), Tata Motors (Sumo and Safari), Force Motors (Trax) and Hindustan Motors (Pajero and Trekker).
The number of models in the UVs and vans segment rose from 42 in FY13 to 68 in FY20.
Brezza, Creta, Ertiga, Nexon, XUV300, Seltos, Venue, Triber, Sonet, Magnite, and Kiger currently constitute 70-80% of India’s UV segment.
Agencies“Consumer preference has shifted towards SUV-type design — aspirational purchase before migrating to a larger SUV, taller driving stance, a more upright and sheer road presence, higher ground clearance, larger tyres, and the flexibility and maximisation of space, etc,” the report says.
It also adds that with increasing personal mobility amid safety concerns due to the emergence of the Covid-19 pandemic, more trips/vacations via own vehicles rather than buses have resulted in aspirational buyers opting for a UV rather than a sedan or a hatchback, as it offers better off-roading capabilities.
