Sports Utility Vehicles (SUV) is a type of off-road vehicle, which includes features such as ground clearance, ruggedness, and four-wheel drive that helps the vehicles to withstand in rough environment. The SUVs offer a broad range of advantages such as power, performance, cargo room, better sightlines, functionality, luxury, and safety, which in turn is driving growth of the SUV market
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Increasing concerns regarding safety is the major factor driving growth of the global SUV market
Increasing concern regarding safety is one of the major driving factors for growth of the market. SUV vehicles are equipped with active safety features such as ADAS (Advanced driver-assistance systems), Anti-Lock Brake System (ABS), traction control (ASR), torque vectoring, and Tire-Pressure Monitoring System (TPMS), which has primary function of not to getting into accidents by providing maximum safety to the driver. For instance, in 2017, Audi launched the AudiQ3 SUV vehicles, which was incorporated with advanced technologies such as Electromechanical Parking Brake, Tire-pressure Monitoring System (TPMS), and Anti-lock Brake System (ABS). Increasing inclination of consumers towards adoption of automobiles with safety features, owing to increasing number of road accidents is expected to boost growth of the SUVs market worldwide. For instance, according to World Health Organization (WHO), an estimated 1.25 million road accidents were reported worldwide in 2013, out of which around 93% road traffic death were reported in low and middle income economies and over 50 million people were injured by road accidents.
Furthermore, stringent legislation and policy framework by government, mandating the installation of safety equipment in automobiles coupled with consumers’ preference for better safety measures is propelling growth of the SUV market. For instance, according to the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, in November 2012, the European Union mandated Tire Pressure Monitoring System (TPMS) in every passenger car models. The U.S. Highway Safety Act of 1991 made airbags and Anti-Lock Braking System (ABS) mandatory in all passenger cars. These technologies offer efficient operation and improved safety, which is expected to drive growth of the SUVs market.
Increasing cost of fuel is one of the major restraining factors for growth of the market
The major factor restraining growth of the market is rising fuel price. Increasing adoption of SUV vehicles is in turn propelling demand for crude oil. This is owing to the fact that SUVs are utility vehicles and consume more fuel. According to Energy Information Administration (EIA), crude oil price increased to US$ 60 per barrel at the end of 2017 from US$ 50 per barrel in 2016. Moreover, according to Coherent Market Insights’ analysis, in India total sales of SUVs were 62,170 units in the month of April 2016, which is decreased to 55,825 units in June 2016. Therefore, increasing price of crude oil is expected to negatively impact growth of the SUV market especially in emerging economies such as India and China.
Global SUV Market: Regional Insights
The SUV market in North America accounted for largest share in global market and is expected to maintain its dominance over the forecast period (2018 – 2026). The growth in this region is attributed to stringent government regulations to prevent road accidents. For instance, in 2008, the U.S. Congress TREAD Act, mandated the deployment of appropriate Tire Pressure Monitoring System (TPMS) technology in all passenger vehicles to improve the driver and passenger safety by means of dashboard warning system. Moreover, in 2016, the U.S. Department of Transportation’s National Highway Traffic Safety Administration officially announced that automakers in the U.S. have to make the autonomous emergency braking system a standard feature for all cars and trucks by 2022. This in turn creates a highly conducive environment for growth of the regional SUV market.
Global SUV Market: Competitive Landscape
Key players operating in the SUVs market include AUDI AG Corporation, Toyota Motor Corporation, Volkswagen AG, Rolls-Royce Motor Cars Limited, General Motors LLC, Jaguar Land Rover Automotive PLC, and Acura. Major players such as AUDI AG, Volkswagen AG, and Rolls-Royce Motors Cars Ltd. are focusing on launching products equipped with advanced features, in order to maintain a competitive edge in the market. For instance, in 2016, Volkswagen launched Tiguan SUV, in India. The salient features added in Tiguan SUV are panoramic sunroof, 4 Motion All-Wheel-Drive System, keyless entry and reverse parking camera, infotainment system and others