The launch of Urban Cruiser will mark Toyota’s entry into the sub-compact SUV segment in India. The launch is set to heat up the competition in the segment with customers getting more buying options, says GlobalData, a leading data and analytics company.

So far, the most successful models of Toyota Kirloskar Motors have been flagship utility vehicles – Innova and Fortuner. Currently, the company does not have a vehicle in the sub 4-meter SUV segment but that is going to change with its partnership with Maruti Suzuki that allows cross-badging. Urban Cruiser is a rebadged version of the highly successful Vitara Brezza but with additional features.

Animesh Kumar, Director of Automotive Consulting at GlobalData, comments: “The sub-compact SUV segment is currently the most lucrative segment and it is not at all surprising that OEMs are introducing models on a regular basis. All major OEMs in India are present in the segment and customers are spoilt with choices with models like Vitara Brezza, Nexon, Venue, XUV300, EcoSport and the recently launched Sonet. Toyota has delayed its entry but better late than never.”

The sub-compact SUV segment contributes over 40% to the total SUV sales and has been quicker than most other segments in terms of recovery from the slump caused by COVID-19. In August 2020, segment sales reached 35,109 units, registering 7.6% year-on-year and 11.4% month-on-month growth, according to the industry body the Society of Indian Automobile Manufacturers.

Kumar continues: “One of the key factors behind the growing demand for the sub-compact SUVs in the Indian market is the value preposition that the vehicles offer compared to compact and mid-size sedans and hatchbacks. The price of sub-compact SUVs ranges from INR700,000 and INR1.3m and they can offer premium features like sunroof, automatic transmission, automatic climate control, touchscreen infotainment system. Vehicles in the segment appeal to pocket-conscious customers who are looking for bigger road presence than traditional hatchbacks/sedans.”

The Urban Cruiser price is anticipated to be between INR800,000-INR1.3m and is likely to include features like rain sensing wipers, electrochromic rear-view mirror and diamond cut alloy wheels.

Urban Cruiser will face stiff competition from Hyundai Venue – which outsold all its competitors in August 2020, Maruti Suzuki Vitara Brezza and Tata Nexon, which sold more than 5,000 units in August 2020. Furthermore, it will also compete with Kia’s latest launch – Sonet, which starts at INR700,000 and has features such as fully digital instrument panel, ventilated seats, TPMS, sound-mood lighting and air purification system.

Kumar concludes: “The sub-compact SUV segment is now highly competitive space where top OEMs offer models with top-notch features and great value for money. Urban Cruiser would face stiff competition from existing models as well as upcoming new vehicle launches in the segment, such as Nissan Magnite but the launch offers significant untapped potential to Toyota Motors in India.”