A study by JATO reveals that the compact SUV segment in India sees the highest demand with the highest percentage price hike over a 3 year period
The compact SUV segment has emerged as the hottest in India. Demand has been increasing by leaps and bounds and longer waiting periods are testimony of its widespread acceptance in the country.
Automakers have also been showing particular importance to this segment with new offerings in quick succession. A recent study conducted by JATO, a global supplier of automotive business intelligence since March 2018 has revealed that the compact SUV segment has seen the sharpest price hike over the past 3 years.
Price Hike – Demand and Supply Driven
The study spanned a period March 2018 to March 2021. It may be noted that while the premium hatchback segment received a mere 3.5 percent price hike and the hatchbacks all got price hikes of just above 4 percent, the premium sedans and MPVs saw prices hiked by 8 percent and 9 percent respectively.
The larger, above four meter SUVs have seen over 9% price increase but it is the compact SUV segment has seen the highest price increase of nearly 11 percent. The increase is prices is compounded by higher regulatory costs and raw material costs which for some time the automakers take on themselves but sooner or later need to pass on a percentage to buyers.
Sales of sedans and other compact cars have dipped in view of rising demand for SUVs and MPVs, causing the automakers to bring in higher pricing. The vehicle segment also plays a major role in the OEM’s ability to absorb costs. For example, a price hike of Rs.5,000 for an Alto is less; than the ability to absorb a price hike of Rs.7,000 in the case of the Vitara Brezza.
Data collated by JATO also reveals another interesting detail. Since March 2020, best selling cars with highest increase in prices are Range Rover (45%), BMW X5 (38%), new Mahindra Thar (35%), new Hyundai i20 (19%) and the Skoda Superb facelift along with the new BMW X3 and Audi A7, all of which have seen price hike of about 18%.
Price Hikes from April 2021
Over the next two days, automakers are once again set to increase prices in India. This would be the second round of price hikes, the first being at the start of this year.
Rising input costs and the COVID-19 pandemic are said to be major reasons for these hikes and automakers such as Hyundai, Maruti Suzuki, Mahindra, Honda, Kia, Renault, BMW, Ford and Nissan have all announced that prices will be increased across range. Detailed prices of all cars will be revealed in the coming days.