SUV lowers Small Car sales – 2011 Indian auto industry report

Mahindra XUV 500

Indian auto industry has been primarily a small car market. Even today it still is, but for the first time in many years, market share of small cars in India have dipped below 50%. Market share, which included cars like Tata Nano, Maruti Alto, Ford Figo, Hyundai Santro and WagonR, reduced to 47% in 2011. Premium compacts such as Maruti Swift, VW Polo and Hyundai i20 told a different story with this segment growing at 6.5% during 2011.

However, it was SUV segment both Indian and imported, that received maximum attention with growth rate increasing by 32% during 2011. Demand went up three fold in the past year which according to Society of Indian Automobile Manufacturers showed that Indian car markets were moving towards premium cars and SUVs despite higher prices.

2011 also witnessed higher interest rates, rising petrol prices which did not affect demand for cars higher up the price bracket. The main reason for shift in demand is that smaller cars are more in demand among middle class and first time buyers. This segment stayed away from purchasing small cars in the first place which has lead to its steady decline.


Also see – SIAM unveils new classification of cars for India