Global automakers are focusing more on SUVs than hatchbacks in India
Global automakers operating in India are moving away from the compact, hatchback segment and focusing on larger, utility vehicles. This marks a significant change in their approach towards India, which until a few years ago was a booming market for small cars. Automakers such as Nissan, Volkswagen and Honda are pulling the plug on their hatchback models – Datsun, Polo and Jazz models respectively. This leaves the segment open to freebies by the top three players in the hatchback category – Maruti Suzuki, Hyundai Motor India and Tata Motors.
The change is in line with a clear shift in consumer preference for bigger, spacious cars that may also offer utility options. The other problem for global automakers is that Maruti Suzuki has over 60 per cent of the hatchback segment, leaving little room for other players to compete and make money. Over time, automakers have discontinued many models in the small car segment due to issues related to viability and profitability.
On the other hand, SUV is being seen as a strong option. Indian consumers find them efficient as they can carry more people and thus reduce the cost of travel per person. The Indian economy is on a strong recovery and growth path, with people confident of spending a little extra for a bigger car as finances become easier and interest rates remain low.
There are some other factors as well. Experts have said that the growing popularity of SUVs is directly related to the aesthetics and aspirations of the consumers. Also, they keep in mind the high seating arrangement and suitability for the Indian roads while buying the vehicle.
Realizing this, car makers have started making cars bigger than 4 meters. This is clearly visible in the fact that the number of hatchback models has seen a steady decline over the past 5 years – from 31 models in 2017 to just 19 in 2022.
Experts believe that SUVs and crossovers will contribute more than 50 per cent of total car sales globally.