[TusharK]

2022 turned out to be a good year for the Indian auto industry, showing signs of recovery as the effects of the pandemic subsided.



In 2022, SUVs outsold hatchbacks in India for the first time. According to our data, the total number of SUVs sold during the year stood at 14,35,012 units, compared to 13,20,102 hatchbacks.

In the SUV segment, the Tata Nexon led the field with 1,68,278 units sold. However, this figure also includes the Nexon EVs sold during the year. The Hyundai Creta came in second with total sales of 1,40,895 units, followed by the Maruti Vitara Brezza with 1,30,563 units.



Maruti continued to rule the hatchback segment, with the WagonR taking the top spot with 2,17,317 units sold. The carmaker sold 1,85,665 units of the Baleno, putting it in second place, followed by the Swift, of which 1,76,424 units were sold during the year.

A quick glance at past data reveals how customer preference is shifting towards SUVs. The share of SUVs in overall sales has been steadily increasing for the past few years. In 2022, new launches like the Tata Punch, Maruti Suzuki Grand Vitara and Toyota’s Urban Cruiser Hyryder contributed to the growth of the segment.

The rising popularity of SUVs can be attributed to their commanding driving position, higher ground clearance, practicality and overall sense of safety one can get while driving on the highway.

SUVs are available with multiple powertrain options, including conventional petrol and diesel engines as well as newer hybrid and electric powertrains. By offering a wide range of powertrain choices in the Nexon, Tata Motors was able to achieve a monthly volume of 15,000 units, making it the highest-selling SUV in India.

SUVs have been gaining popularity all over the world for the past few years. However, whether this trend will continue in 2023 is anyone’s guess. That being said, as more SUVs flood into the market, it looks like the segment is only going to boom further.

Link to Team-BHP News

[vinya_jag]

Originally Posted by TusharK

2022 turned out to be a good year for the Indian auto industry, showing signs of recovery as the effects of the pandemic subsided.
[/b]

Tech Industry had its Glory days during the pandemic. Windows and Mac laptops sold like never before. Whole world were meeting online. Shopping was online too. Edu startups cropped up everywhere. Telehealth was the new thing.

Today, look at these Tech stocks. Each one of the above have been oversold. There is no way the sales will continue to keep up or even meet a part of what was sold during the pandemic.

I feel, the post pandemic world is waking up to another bubble, which is the car market. Can't point out the reason for it, maybe the tech money has created a surplus amongst the car buying public. There are more empty spaces on the rods during peak hours. People still haven't come back to their offices fully.

A year from now, Can the car market too hit the same trough, tech is facing today? We should pass these few (maybe 4-5 years) as an aberration and see what comes after.

On the topic of SUVs outselling hatchbacks, I feel sad that a large populace was forced to buy higher ground clearance vehicles, which weigh 30% more, return 30% less efficiency, are 30% more expensive, and the government would feel happy that no one is asking for better roads

[sunilarkt]

I think there is more to this shift than just the higher ground clearance. Cross overs and SUV's are taking over the car market throught the world! Transition is so rampant that even sports car brands are jumping on the bangwagon (Urus, DB9 etc)

Originally Posted by vinya_jag

On the topic of SUVs outselling hatchbacks, I feel sad that a large populace was forced to buy higher ground clearance vehicles, which weigh 30% more, return 30% less efficiency, are 30% more expensive, and the government would feel happy that no one is asking for better roads

[volkman10]

It is actually the UV market that is in focus.

There is an exciting tussle underway for leadership in India’s booming utility vehicle (UV) market, which has seen sales of 14,69,594 UVs in the first nine months of the ongoing fiscal year, up a solid 42% year on year (April-December 2021: 10,36,006 units).

The first three are in a neck-and-neck battle for supremacy. Tata Motors is ahead of Maruti Suzuki by 8,398 units, and Maruti is ahead of Mahindra by just 2,323 units. Fourth-placed Hyundai is 33,379 units behind M&M at the end of December 2022.




Link

[GTO]

To me, this also signifies the end of "cheap" in the Indian market. At one time, cheap hatchbacks like the Alto were the top sellers in India. Take a look at last month's Top 10. We have a big hatchback, an MPV, the Nexon and even the pricey Creta on the list! The purchasing power of the average Indian car customer has grown & how . Many first-time car buyers too are jumping straight to the 10-lakh segment:

Originally Posted by sunilarkt

I think there is more to this shift than just the higher ground clearance.

Agreed. It's also about practicality, driving position, style (crossovers & SUVs are usually seen as being way more stylish than hatchbacks or sedans) and so on.

Importantly, it's about choice & selection. The best products & the widest selection is now among Crossovers & SUVs. Manufacturers will spend their R&D money where the profits lie. Hatchbacks sell only under the 10-lakh price band and above that, sedans are more or less dead. The only segments with high transaction prices are MPVs, SUVs & Crossovers.

How many sedans can you buy for 20 lakh rupees today? Or for 35 lakhs? You can count the number of options on one hand.

[Axe77]

Originally Posted by GTO

To me, this also signifies the end of "cheap" in the Indian market. At one time, cheap hatchbacks like the Alto were the top sellers in India. Take a look at last month's Top 10. We have a big hatchback, an MPV, the Nexon and even the pricey Creta on the list! The purchasing power of the average Indian car customer has grown & how . Many first-time car buyers too are jumping straight to the 10-lakh segment:

While this is most certainly one aspect (even the primary aspect) of the trend I wonder whether there is another contributory factor. That of economic downturn / uncertainty etc. We’ve seen that in slowdowns etc luxury purchases suffer the least. Its lower down the chain that consumption is affected first and most.

Similarly, I wonder if there is an element of economic uncertainty in the last 12 - 24 months, which may have led that buyer segment to pause before its purchase decision - something that may have less affected the segment slightly above it. Cars like Wagon R, Alto and Swift have shown a % YOY decline of 20 - 40% - that’s quite sharp by any measure.

[gnome]

Originally Posted by GTO

To me, this also signifies the end of "cheap" in the Indian market. At one time, cheap hatchbacks like the Alto were the top sellers in India. Take a look at last month's Top 10. We have a big hatchback, an MPV, the Nexon and even the pricey Creta on the list! The purchasing power of the average Indian car customer has grown & how .

I think this has more to do with the kind of growth India economy is seeing. Past few years, the growth is K-shaped with much increased gap between rich and poor. It is evident from decline in overall car sales, and decline in 2-wheeler sales also.
Urban infrastructure is collapsing while inter-city highways are getting better - this might also be a reason to buy cars primarily for long-distance travel vs small cars for city commute.

[HammerHead]

Interesting data. The pricing gap between B2 and C1 segment is not that big and considering 5 year car loan, it becomes manageable. With first time buyers keeping aside 10-12-lakh budget, there are 'practically' better options available within the C1 segment.

Look at this.

Hatchbacks in the B2 segment. Just 3 of them considering Toyota Glanza is nothing but Suzuki Baleno.

Tata Altroz
Maruti Suzuki Baleno
Hyundai i20

While C1 segment has good choice.

Tata Nexon
Maruti Suzuki Brezza
Hyundai Venue
Renault Kiger
Nissan Magnite
Kia Sonet

&
Citroen C3
Tata Punch

[gururajrv]

I will credit the consumers for shelling out over 10 lakhs as base buy. Looks like customers are now well informed buyers who prioritize safety over economy

[Nilesh5417]

Originally Posted by vinya_jag

I feel, the post pandemic world is waking up to another bubble, which is the car market. Can't point out the reason for it, maybe the tech money has created a surplus amongst the car buying public.

All countries printed massive amount of money during COVID which isn't backed by gold like it used to be So money has lost its worth. To those who got a big chunk of this money, it's still the same world. For the have nots, inflation is a killer.

But SUVs and crossovers do make sense in the Indian context. The roads are bad, traffic keeps getting worse every passing day. The high seat, better visibility and tough looks do help - give that added sense of safety even if the car itself has a 2star NCAP.

I want to stick my neck out and say that sedans will make a comeback in a couple of decades like all things retro that people seem to love. Hopefully road travel by then isn't as much of a pain as it used to be.

[TSI_Exhaust]

Originally Posted by HammerHead

Interesting data. The pricing gap between B2 and C1 segment is not that big and considering 5 year car loan, it becomes manageable. With first time buyers keeping aside 10-12-lakh budget, there are 'practically' better options available within the C1 segment.

Look at this.

Hatchbacks in the B2 segment. Just 3 of them considering Toyota Glanza is nothing but Suzuki Baleno.

Tata Altroz
Maruti Suzuki Baleno
Hyundai i20

While C1 segment has good choice.

Tata Nexon
Maruti Suzuki Brezza
Hyundai Venue
Renault Kiger
Nissan Magnite
Kia Sonet

&
Citroen C3
Tata Punch

This is what I exactly had in my mind, same points. Given the prices at which cars are selling these days, if a buyer can shell out 10-12 lakhs the C1 segment has way more practical options with better engine-gearbox combos.

A separate opinion, I feel the C1 offerings are eating up the B2 segment offerings and in the not so distant future the B2 segment will be history. Haven't seen the B2 segment coming up with exciting products for a while now.

[Nithesh_M]

With raw material prices shooting up month on month manufacturers can no longer afford to sell sub 2 lakh rupee cars like the Alto or Kwid like they did 5 years ago.
Manufacturing and R&D costs for an Alto or a Creta is almost in the same ball park(check your invoices to know actual cost to manufacturer).
That has led to entry level cars like the new Alto and the old Kwid breaching the 5 lakh rupee range these days. Heck the Creta and Seltos had an entry range under 10l not two years ago and now they're a lakh expensive.

The average Indian has decided they would rather put in the 5l as downpayment and take a loan for a car a segment or two higher considering the state of potholed roads and flood occurences every year during monsoon(sedan killer) plus longer term loans being offered by banks help the case.

It would be interesting to see how many of the vehicles sold are on bank loan. That would determine the PPP. Most buyers like me bought a car post pandemic when we realized we had to fend for ourselves in the case of medical emergencies. Having a decent boot laden car to get monthly groceries in the lockdown is a boon.

[AROO7]

Small car costs have gone up with time and especially the premium ones are already in the price range of compact SUVs. Also one needs to consider the inflation for example in 2011 when we got our i10 Sportz it costed us 5.6 lakhs on-road. Today that's the ex-showroom price of the Grand i10 Nios base variant. Agreed the features and safety equipments have added to the cost but back then and even today the consumer mindset hasn't change. So the more these hatchback and sedans breach 10 lakh and 20 lakh price bracket respectively the more they will go extinct. Thus this explains the reason behind people jumping segments. Because in the end a typical Indian consumer still thinks bigger for least money is the best (best example is the success of WagonR and Ertiga).

On a side note, I have a pessimistic opinion going forward in 2023. The sales figure were more or less fueled by cheap finance options, people being wary of 2-wheelers and public transport, and economy opening up. But with the loan rates going up and car model prices bound to see a couple of price bump I don't feel confident that the same growth rate will be seen in the coming financial year.

Since we are here I genuinely feel our honorable finance minister should look in the tax structures of our car market and make some corrections here. Majority of the car buyer pay high income tax and in turn steep tax rates while buying the car (talk about double taxation burden). Especially they need to make luxury car brands more affordable as they are the ones which will bring competition and help our homegrown carmakers mature even further. Because a C-Class selling at 70 lakhs or Fortuner for 50 lakhs is completely ridiculous even considering the inflation.

[Asoon]

Few factors in play here

1) Purchasing power has gone up, hence entery level cars (Alto etc) are losing market share, I remember alto and dzire were 1/2 nd postion alternatively in monthly sales chart for a long time

2) Car is becoming a utility product from a show piece . Which means car commute have gone frequent and longer for most families / owners. Ang given the road infra in the nation that extra 10-15 mm ground clearance play important role in decision making

3) Appeal which Sedans had in 90s / 2000s is taken over by SUVs. Major driver for this is the Powerful image which Fortuner / Scorpio (old) command, that has tricked down to every budget segment