Auto companies entice hatchback owners with small, affordable SUVs

MUMBAI: With increasing preference for crossover and sports utility vehicles in India, automakers are coming out with a range of small and affordable SUVs to offer an alternative to buyers who look for small cars.
The likes of Maruti Suzuki, Hyundai Motor, Tata Motors and Nissan-owned Datsun have lined up small SUVs for launch and these are likely to be priced below Rs 6 lakh. Even new entrants like the Groupe PSA too have small crossovers or SUVs as part of their India rollout plan.

Off the block first will be Maruti Suzuki’s Y1K, which is set to hit the roads in the next one year — in the second half of 2019. Tata Motors has advanced the launch of the X445, or the Hornbill, by a year from the previous plan of 2022. Hyundai will likely drive in a micro SUV in 2021-22, while Datsun’s small Go Cross SUV is set to make an entry in two years.

Mayank Pareek, president of the passenger vehicle division at Tata Motors, declined to comment on the company’s product plans, but said the opportunity for small SUVs was huge. “People who have been purchasing hatchbacks for years will be looking for an upgrade. India sells over 1million hatchbacks every year. Almost 58% of the owners replace their car every six years (and for them) the micro or small SUV becomes a good alternative,” he said.

These SUVs, crossovers or tallboy cars are likely to be powered predominantly by compact petrol engines as seen in small cars and come out with automated manual transmission — the cheap alternative to automatic transmission that is fast becoming popular among small-car buyers. The segment was pioneered by Mahindra’s KUV 100. Maruti Suzuki’s Ignis too falls in the same price range. Interestingly, by the time others are ready with their products, Mahindra will have its KUV electric S110 ready for market launch next year.

To be sure, these will not be true-blue sports utility vehicles. This new breed will have a tall stance, high seating position, appears like an SUV, but are like soft-roaders such as hatchbacks and small cars. These will be positioned below the existing sub-4-metre SUVs like the Ford EcoSport and Maruti Suzuki Vitara Brezza.

The SUV segment is a key part of focus for the future for Hyundai Motor India, managing director YK Koo told ET. It is working on a sub-4-metre Vitara Brezza and EcoSport rival, and may then explore the introduction of a micro SUV. “SUVs can offer a good alternative to small-car buyers. It (a micro SUV from Hyundai) is not part of immediate product launch plans, but it is planned after 2020," he said.

Gaurav Vangaal, senior analyst at automobile market forecasting firm IHS Markit, said the entrylevel SUV was a new emerging segment in the Indian market and expected to contribute about 35% to the overall compact SUV market at about 3.5 lakh units per annum in three-five years. "After Mahindra's KUV 100 launch, the sub-segment caught the attention of all major global car manufacturers. It is expected to see a lot of action in the coming years," he added.

The PSA Group also wants to tap into the growing preference of tallboy vehicles. “Among the three smart vehicles planned by the French carmaker, one is a vehicle which is benchmarked against the Ignis and KUV 100.