The fuel hike is unlikely to dampen the country’s appetite for the sport utility vehicles (SUVs), but this might force the manufacturers to hunt for more fuel-efficient techniques to keep the momentum going. SUVs, which include the likes of Honda CR-V, Ford Endeavour, Chevrolet Captive and Suzuki Grand Vitara, will continue to witness a double-digit growth, industry experts and analysts feel.
“Despite a significant increase in fuel prices, we do not see any impact on sales of premium SUVs as these symbolizes the class of fairly rich people who are generally unaffected by fluctuations in fuel prices,” says Jnaneswar Sen, senior general manager, Honda Siel Cars India.
“There is no denying the fact that the cost of ownership of SUVs will go up by 3-4% after Wednesday’s hike in fuel prices. However, on the other hand since SUV buyers in the country are generally high-income people, hence the segment would continue to grow at 10-11% as compared to a single digit growth of 8-9% in the overall industry,” adds Vaishali Jajoo, senior auto analyst, Angel Broking.
This optimism about the growth in the segment is not without a reason even when the global oil prices have risen from $67 a barrel in February to around $135 a barrel now. In March alone, the premium SUV segment witnessed a growth of 27.6% at 15,293 units as compared to 11,985 units in February.
It’s not just entry-level the SUVs that is witnessing growth. Even premium segment SUVs, priced around Rs 15 lakh and above, is growing at a phenomenal rate. According to figures released by the Society of Indian Automobile Manufacturers’ for March, while Hindustan Motor’s Pajero witnessed a growth of 272% at 242 units in March as compared to 65 units in February, General Motors’ recently Lunched Captiva helped the company to register a growth of 18.73% at 1,008 units vis-?-vis 849 units in February. This was followed by a growth of 15.28% of Tata Motors’ Safari at 3,447 units in March as compared to 2,990 units in February and a growth of 5.95% of Ford Endeavour at 392 units vis-?-vis 370 units in February.
“Unlike US and Europe where SUVs constitute around 60% to 70% of total automobiles sold in the country, the numbers are very small in India and the segment constitutes a mere 7-8% of the total utility vehicles. Hence, we believe that due to fairly low SUV population in India, the segment will remain unaffected,” says P Balendran, vice-president, General Motor India. Despite the encouraging figures the industry fears that the continuous hike in fuel prices will eventually result in manufacturers offering more fuel-efficient vehicles in the SUV segment to keep their sales growing.