Author: Mr. Vinay Pant, Head of Marketing, Tata Motors Passenger Vehicles Ltd.
Amidst the myriad vehicle form factors available in the market, the SUV segment has witnessed an unprecedented upsurge in demand globally. In India, a nation known for its long-standing predilection towards smaller cars, the sales of SUVs have scaled up remarkably in recent years defying convention. This can be attributed to a plethora of appealing attributes inherent in SUVs encompassing an elevated seating arrangement, artfully sculpted aesthetics, enhanced cargo capacity, as well as a commanding road presence, among other captivating features, which have allured discerning consumers.
Growing SUV Trend
Globally, the sales of SUVs have experienced extraordinary levels of growth and sustained favour among consumers. The SUV market is projected to grow from USD 885.8 billion in 2023 to USD 1,221.7 billion in 2027, at a CAGR of 6.6 per cent. The growing demand for vehicles with increased comfort features would create potential demand for SUVs in the coming years. In the Indian automobile market, out of the top 25 vehicles sold, 12 are SUVs, emphasizing their prominence. In fact, SUVs and UVs accounted for over 1.9 million units, representing 50 percent of the total vehicles sold in FY2023.
One of the primary factors contributing to the surge in disposition towards SUV in India can be attributed to the road conditions prevalent across the country. India has the world's second-largest road network and every year thousands of kilometres of new expressways and highways are getting added. However, the impact of India’s weather, terrain and rapid urbanisation on the road infrastructure presents numerous challenges for our drivers. In this context, vehicles with higher ground clearance have always been favoured by the Indian car buyers, and SUVs emerge as the optimal choice for navigating Indian roads. In recent times, the availability of SUV models across a wide price range ensures that they cater to the diverse needs and lifestyles of myriad types of buyers.
Understanding Changing Customer Preference in the Dynamic Indian Automotive Landscape
Far from the days when SUVs seemed unattainable due to their high price and scant choice, the category has fast evolved into objects of desire for today's consumers. This transformation can be attributed in part to increasingly stringent safety regulations, which has narrowed the price gap between SUVs and the popular segments like the hatches and sedans. As the Indian automobile buyer is becoming more affluent and aspirational they are now wanting to upgrade to safer, larger and more advanced vehicles; and SUVs fit this ambition perfectly. SUVs are practical, robust and fuel efficient making it the new status symbol among customers.
The approach to building SUVs, too, has undergone a revolutionary shift. SUVs have evolved from body-on-frame designs to monocoque structures, thereby improving the vehicle handling, ride quality and most importantly, their safety. Another notable improvement has been on the fuel efficiency front, and this has further heightened their appeal. Some automobile manufacturers read this customer trend early, and today SUVs are even challenging hatches in terms of price points. This has made these once-elusive vehicles more accessible to a broader range of consumers. No wonder then, SUVs have been warmly embraced by consumers, and this trend shows no signs of slowing down.
Segmentation of SUVs
The upsurge in buyer enthusiasm has sparked a proliferation of SUV categories within the Indian automotive market. As the dominant segments approached their peak, manufacturers swiftly adapted by presenting a plethora of sub-segments of SUVs, meticulously crafted to accommodate even the most nuanced preferences of buyers. Through this astute approach, they successfully addressed the diverse requirements of customers across various dimensions and price ranges.
Historically, Indian car buyers have displayed a fondness for compact hatchbacks due to their small dimensions, facilitating effortless navigation through restricted spaces, commendable fuel efficiency, and competitive price points. Nevertheless, the shifting dynamics within the automotive landscape towards the SUV segment indicate that consumer preferences are evolving and transcending mere economic considerations. This transformation can be attributed to changing lifestyles, augmented disposable incomes, and an enhanced awareness of emerging market trends. As a consequence, car buyers now seek vehicles that embody the latest advancements, including cutting-edge features such as connected car technology, additional safety through 6+ airbags and Advanced Driver Assistance System (ADAS), high end branded infotainment, panoramic sunroofs, ventilated and powered seats (even for co-passengers), and an array of other sophisticated amenities.
The interpretation of an SUV by car buyers has undergone a notable transformation, mirroring their evolving preferences. Once accustomed to bulky, boxy, and underpowered SUVs that posed challenges in terms of manoeuvrability, today's consumers seek SUVs that align with their desire for enhanced road presence, cutting-edge technology, and contemporary designs. Through the introduction of sub-segments such as lifestyle, high, mid-size, compact, sub-compact SUV and more, manufacturers have successfully tapped into the unique desires of potential buyers, enticing them away from the traditionally favoured hatchbacks and sedans.
The Power of Marketing and Branding
Along with providing a wide range of options, automakers have also excelled in aligning consumer inclination towards SUVs with targeted marketing and branding techniques that have together contributed to the success of SUVs in India. Marketing strategies have played a pivotal role in boosting customer demand for SUVs by skilfully highlighting their USPs such as design and looks, technology, safety, performance, accessibility, and other key attributes.
With the rapidly evolving customer sentiments, automakers have managed to effectively leverage their marketing prowess by generating hype around SUVs. Targeting the youth, marketing departments are creating campaigns targeted to stand out in the era of cut-throat competition and information overload. With the help of eye-catching advertisements, innovative social media campaigns and having popular celebrities on board as ambassadors, automakers are continuously innovating by experimenting with various marketing tools to attract consumers to their SUVs. More than the product, they want to inculcate a new lifestyle among consumers, something that is stylish and desirable, to appeal to the inherent sensibilities of the buyers.
Tailoring SUVs for the Indian Market
The SUV market in India begins with the sub-compact SUVs and goes up to the premium and luxury SUVs – creating avenues of opportunities for OEMs in India to create various sub-segments as per the choice and preference of customers. The continued diversification has also allowed manufacturers to open up the market for more SUVs for buyers to choose from, such as the sub-compact SUV that combines the utility of a hatchback with the durability of an SUV.
With the push towards electric mobility, manufacturers have also started developing e-SUVs that combine the positives of an SUV with the efficiency of a green powertrain. This segment has been witnessing a steady increase in sales, which is bolstered by the confidence of environmentally conscious buyers who want an SUV that is not powered by fossil fuels.
The Path Forward
The SUV craze in India has been witnessing an exemplary rise in growth and does not show any sign of slowing down yet. The overwhelming demand for SUVs in India has caused the other segments, especially the hatch and sedan segment a serious run for their money. By keenly analysing the needs and aspirations of the consumers, manufacturers have been able to position their SUVs with key attributes such as versatility, offering customization options, packing in the latest in technology and safety, and offering attractive financing options. With more SUVs set to join the market, the role of marketing and branding in shaping consumer preferences and driving sales continues to remain crucial in the years to come.
Published: 5 January, 2023 | www.exchange4media.com
