Tata beats Maruti, Hyundai in compact SUV race

Tata Motors became the market leader in the compact SUV segment in FY22, beating Hyundai Motor India and Maruti Suzuki India. The company’s Nexon (combustion-engine variant) emerged as the top-selling compact SUV with 122,000 units, surpassing Maruti Suzuki’s Vitara Brezza (114,000 units), Hyundai’s Venue (105,000 units) and Kia’s Sonet (74,000 units).

Other compact SUVs in India (Mahindra XUV300, Toyota Urban Cruiser, Nissan Magnite, Renault Kiger and Tata Punch) combined sold 260,000 units.

Automotive analysts FE spoke to said multiple reasons favored Tata Motors in FY22, including the fact that customers knew Hyundai would launch the Venue facelift in June this year and Maruti Suzuki the all-new Vitara Brezza.

“When a car is in the outgoing phase, sales for that model tend to fall unless there are high discounts that can boost sales,” said one analyst. “In FY22, we didn’t see major discounts at the showroom level, as the availability of cars itself was challenging.”

Tata Motors also took advantage of the government’s “vocal for local” campaign. Since 2020, Tata cars come with a ‘vocal for local’ sticker on them, usually on the rear window. A Gurgaon car dealership from a competing carmaker told: FE that he has heard from buyers, and oddly enough, that Tata Motors is more Indian than other automakers in India, even though the supply chain of all automakers is global.

Gaurav Vangaal, associate director, Light Vehicle Forecasting, S&P Global Mobility, said: FE that Tata Motors was able to increase capacity last year and that cars like the Nexon therefore had shorter waiting times than competitors like the Vitara Brezza and the Venue. “While last year the average wait time for the Nexon was about six months — comparable to other compact SUVs — dealers were able to deliver it to customers in less than three months,” Vangaal said. “There is a high probability that competitors’ customers will move to Tata due to the latter’s shorter waiting time; if a customer wants a car, she usually wants it ‘now’.”

Vinkesh Gulati, president of the Federation of Automobile Dealers’ Association (Fada), recently told FE that Tata Motors is one of the few automakers to increase car production capacity in recent times. “Tata Motors has been able to increase capacity and could even reach 45,000 cars per month,” said Gulati.

In May, Tata Motors became India’s second largest automaker, overtaking legendary No. 2 Hyundai India. Tata Motors sold 43,341 cars, beating Hyundai India’s 42,293 sales.

Going forward, analysts said that Maruti Suzuki will regain its leadership position in the compact SUV segment. “The all-new Vitara Brezza has already caused quite a stir before its launch,” says Vangaal. “It will certainly attract a large proportion of customers to the Maruti Suzuki showrooms. To some extent, even the new location will attract some of the buyers, impacting the Nexon’s sales share in the coming months.”

Another analyst said a horde of customers want to buy compact SUVs, but there are not enough cars on the market due to the shortage of semiconductors. “As Maruti Suzuki and Hyundai increase their offerings in this segment, they will attract buyers,” the analyst added.

Compact SUV has become the largest body type of cars in India with sales of 675,000 units in FY22. These have grown from 5% share of total passenger vehicle (PV) sales in FY16 to 8% in FY17, 11% in FY18 and FY19, 13% in FY20, 16% in FY21 and 22% in FY22. Compact SUVs are also the most participating segment in India, with eight automakers offering nine models.

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