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NEW DELHI : Sales of passenger vehicles are showing signs of healthy recovery, driven by rocketing sales of utility vehicles (UVs), which accounted for five of India’s 10 best-selling passenger vehicles in April.

Out of these, four were sport-utility vehicles (SUVs), led by Tata Motors’ Nexon, whose sales nearly doubled in April from a year earlier. According to data shared with Mint by auto intelligence firm JATO Dynamics, the Tata Nexon outsold Maruti Suzuki’s Baleno and Alto 800, a premium hatchback and a micro-hatch, respectively, in the first four months of this year, unseating the Hyundai Creta as India’s highest-selling SUV in 2021.

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The Creta, however, followed close on the heels of the Nexon at the No.2 spot in April, selling 12,651 units, whereas the Nexon sold 13,471 units.

Maruti Suzuki’s multi-utility vehicle (MUV) Ertiga sat unrivalled at the top last month, while sub-compact SUVs Vitara Brezza and Tata Punch rounded off the top 5.

According to data released by the Federation of Automotive Dealers Associations (FADA), passenger vehicle registrations in April grew by nearly 12%, compared with the same month in 2019, a normal pre-pandemic baseline.

It was the only segment which showed growth in April compared to FY19, besides tractors, even as overall industry volumes shrank by 6%.

The growing market share of companies with a well-accepted SUV portfolio reflects changing customer preferences—FADA data shows that SUV-focused carmakers Mahindra and Mahindra, Tata Motors and Kia Motors India gained market share in April at 8.4%, 13.8%, and 6.4%, respectively, compared with a 5.7%, 9.2% and 5.6% in April last year.

During the same time, market leader Maruti Suzuki lost its market share from nearly 46% to 40%, owing to a lack of new SUV launches.

South Korean carmaker Hyundai, too, yielded some market share (about 2 percentage points) to competition as it grappled with production challenges last year.

This year another round of new SUV launches is set to further intensify competition in the segment.

“SUV sales are in a boom. They’re driving volumes in the industry and have grown significantly from a year ago. SUVs now account for 43% of all passenger vehicle sales, compared with just over 26% in 2019. This year will see the launch of nine new SUV models. We expect SUV sales to climb at a CAGR (compound average growth rate) of 9% over the next seven years, to exceed 2.16 million units by 2028", Ravi Bhatia, president and director of JATO Dynamics India, said.

“In fact, SUVs are expected not only to drive volumes but also profitability for OEMs (original equipment makers). Even brands associated with sports cars and luxury sedans are looking at SUVs seriously. The mini-car and subcompact hatchback body styles form the belly of the Indian car market, with a combined 47% market share between them. We know that it’s hard for product designers to balance economics with aspiration, and as a result, we expect to see more consumers shifting to sub-compact SUVs. MPVs and minivans are the third largest segment and have also seen some attention of OEMs to cater to larger families and the taxi segment", he added.

Meanwhile, as demand for UVs grows, so does the waiting period.

“SUVs are definitely popular with customers right now, but due to a widespread shortage of semiconductors, we are seeing waiting periods range from two months to over a year. Waiting periods are also high for some popular small cars and premium hatchbacks, such as the Baleno Alpha AMT & Renault Kiger," Vinkesh Gulati, president of FADA, said in an interview.

According to data shared by FADA, Maruti’s Ertiga MPV is on a waiting period of 3-4 months depending on the model, while the Baleno Alpha AMT variant is attracting a waiting period of 2.5-3 months.

The Hyundai Creta also has a delivery timeline of 2-4 months, with delivery times for some models as high as over six months.

Mahindra’s Thar and XUV700 have waiting periods of over six months and one year, respectively, while the newly launched Kia Carens is also unavailable for a year.

Both the Tata Punch and Nexon have waiting periods of about two months, FADA said.

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