SEMA News—June 2021

International

OEMs Vie for India Market Share

Off-Roading Growth Drives Competition in Pickup and SUV Segments

By Linda Spencer

The Rainforest Challenge (RFC) India will be held again this year in July 2021 following a hiatus last year due to COVID-19. The Indian edition of the series, which began in 2014, is a grueling seven-day off-roading event for professional drivers.

The RFC started in Malaysia and is also held in Italy, Russia, the Balkans, Poland, Sri Lanka, Vietnam, Thailand, Tunisia, China and Australia. There are also numerous sportsman-class events throughout India organized by local clubs such as those run by Jeep enthusiasts, including the Western Wanderers, the Bangalore Jeep Club and the Club Himalayan Devils.

Local tire manufacturer Apollo Tyres created Bad Road Buddies to organize off-road events, and Indian car manufacturer Mahindra & Mahindra brought together enthusiast clubs in 2019 from around India for the third Thar Fest in Kochi, celebrating the off-roading attributes of the Mahindra Thar.

SEMA News spoke with Ashish Gupta from Cougar Motorsports, the organizer of RFC India based in New Delhi. We talked about the event as well as off-roading more broadly in the country of 1.3 billion. We first discussed the local enthusiasts’ vehicles of choice.

“The Suzuki Gypsy [Samurai in other markets] and the Mahindra Thar are the preferred vehicles to use for extreme off-road customization” Gupta explained.

For more casual off-road excursions, enthusiasts may choose the Mitsubishi Pajero, Toyota Fortuner, Ford Endeavour and Isuzu V-Cross. Gupta noted that there are also some premium SUVs, including models from the Jeep and Land Rover stables as well as a few Polaris ATVs and RZRs, but he noted that the numbers of those vehicles were much smaller.

Sportsman off-roading events, typically sponsored by local clubs, are growing across India.

“The southern state of Kerala has numerous off-roading clubs and enthusiasts with perhaps the highest number of 4x4 vehicles per capita, but off-roading is popular all across the country, with clubs in almost all major states and large cities,” Gupta said. “The national capital region [which includes Delhi and its suburbs] as well as the Union Territory of Chandigarh in the north have a number of active off-roaders as well.”

Pickups have never been big sellers in India as lifestyle vehicles, and the choices to date have been slim. Only the D-Max V-Cross and Tata Xenon have been available in the market, but that may be changing. The Ford Ranger and sportier Ford Ranger Raptor have both been spotted being tested in India recently.

It’s been reported separately that Toyota is considering assembling the HiLux in India, and the Ford Ranger and Ranger Raptor are expected to be imported into India. The D-Max V-Cross is locally manufactured at Isuzu’s newly opened manufacturing plant at Sri City in Andhra Pradesh, India. However, Gupta is skeptical that pickups will become big sellers.

“Isuzu entered this segment aggressively a few years ago with the D-Max V-Cross,” he said. “However, those vehicles have not been as popular as elsewhere in Southeast Asia and America. They are not perceived as lifestyle vehicles [also not as “premium”] as in other markets.”

He also noted that regulations prohibit the use of a privately registered vehicle to be used to carry commercial goods, so they cannot be “dual-use.” They are also almost as expensive as the regular SUVs that provide much more ride comfort for a family as well as secure trunk storage. Driving conditions and parking space in crowded cities is also a deterrent.

Still, a new law in India allows vehicle manufacturers to import up to 2,500 units of a vehicle without the need for homologation. Manufacturers therefore have a low-cost way to try out new brands. That will allow the OEMs to try to win over Indian motorists to their vehicles and undergo the required homologation only if the results (and sales) warrant it.

We asked Gupta about the possibility of the new pickups taking part in the RFC.

“We are open to starting a pickup category in the Rainforest Challenge with separate special stages for the vehicles, subject to getting a sizeable number of entries,” he responded. “They will not be able to compete in the common category with other vehicles.”

Certain products, such as rollcages, are often made in India.

“Product availability has improved significantly in line with the growth of the sport and especially since the Rainforest Challenge was launched in India,”
Gupta said.

Products such as winches and suspension products are typically imported and provide an ongoing opportunity for U.S. suppliers.

“Competition winches, performance axles, suspension parts and tires are imported,” he said, and he noted that Warn has been a past sponsor of the RFC. Distribution in India is typically through small non-stocking shops due to high inventory costs and somewhat limited sales.

The Jeep Wrangler is being built and sold in India but faces stiff competition from the cheaper lookalike Mahindra Thar. Gupta doesn’t believe that the iconic vehicle will be a best seller due to purchase and maintenance costs.

“For example, the Jeep Wrangler and Land Rover Defender are very, very expensive [starting in the range of $100,000 USD],” Gupta explained. “Even those who buy them rarely put them to off-road use because the costs of spares and service are high as well. Jeep has launched the locally assembled Wrangler and cut prices, but by a mere $15,000 USD.”

Car manufacturer Stellantis is more optimistic, despite currently having a market share estimated at less than 1% of the market, which is dominated by local makes. The vehicle manufacturer announced in January of this year that it is investing $250 million in India over the next two years. That is on top of a $450 million investment over the past four years.

Stellantis plans to fulfill the domestic demand for the latest Jeep Wrangler and Jeep Cherokee at its plant in Ranjangaon, Western India (a joint venture with Tata), by the end of 2022.

For more information on SEMA’s international programs and resources, visit www.sema.org/international.