Indian Automakers Scramble Aboard Utility Bandwagon

MUMBAI – The profile of  India's utility vehicles is changing rapidly as they move away from the boxy architecture of traditional minivans and multipurpose vehicles to car-like CUVs or SUVs.

Indian automakers are launching at least 33 utilities in the next 33 months.

They continue to be classified as light trucks in WardsAuto data and as utility vehicles by the Society of Indian Automobile Manufacturers. But they are becoming a different class of vehicles.

In their styling, comfort, drivability and performance, the CUVs are as good as the cars on which they are based. But they also offer greater ground clearance and overall height, as well as better visibility.

In most of the new utilities, manufacturers are creating more space by pushing forward the instrument panel and steering wheel over the engine compartment and transferring the baggage area to open roof rails. Some are making door panels and seats thinner, creating a “hollow” below the front seats to increase legroom for second-row passengers and providing more headroom by raising the height.

Mahindra and Tata plan a total of seven or eight CUVs in a bid to regain their eroding market share. Ford, Maruti Suzuki and Volkswagen are launching at least two each, while four other automakers are joining the game with a single launch each.

Luxury automakers Mercedes, Audi, BMW and Land Rover are launching nearly 13 utility vehicles combined. They will offer at least one or two basic models such as the Audi Q1and Q3,  BMW X1 or Land Rover Discovery Sport, each affordably priced between Rs3 million-Rs4 million ($48,000-$64,000) without compromising their high standards for decor, comfort and performance.

Other models will carry a heftier price tag. The Mercedes GLE coupe may be priced at Rs10 million ($160,000), while FCA, after years of hesitation toward entering the Indian market, will launch the Jeep Wrangler at Rs3 million and the Cherokee at Rs5 million ($75,000).

At the very top is U.K. automaker Bentley’s first-ever SUV, the Bentayga, which may launch in India at a price ranging from Rs30 million to Rs40 million ($480,000-$635,000).

CUVs are emerging as the vehicle of choice for young, upwardly mobile city dwellers because of their relative affordability, prestige and all-round performance.

Sales of older-generation MPVs such as the Mahindra Bolero and Scorpio, Maruti Suzuki Omni and Ertiga, Tata Sumo and Safari and Toyota Innova continue to grow amid continuing large rural demand but are not clicking in the newly emerging urban markets.

Mahindra’s Bolero has ranked among India’s 10 best-selling light vehicles for years and Scorpio has been a steady seller as well. But Pawan Goenka, president and executive director, says efforts to make those models more car-like through new models such as the Quarto, Thar, Vento, XUV 500 and Xylo did not succeed.

“Management did not see the changing market preferences or misunderstood them,” he says. “Again, it was not quick enough to respond to the new challenge of compact SUVs as growth and market share started falling.”