Although hardened interest rates and rising competition have dampened the sales of passenger cars, the personal utility vehicles (PUVs) segment, comprising high-end utility vehicles (UVs) and sports utilitiy vehicles (SUVs), have grown by 24.5% in the first quarter of the fiscal 2007 (April-June) as against last year, with homegrown players Mahindra & Mahindra (M&M) and Tata Motors leading the way.
Though the entire UV segment grew at a slower pace of 10.95% for this quarter when compared to 12.67% growth in the passenger car segment, the growth in the 7 seater UV has been a whopping 60% with 28,115 units sold this quarter as against 17,552 units sold in the same period last year. This growth covered up for a drop in sales in 8 and 9 seater and B2 segment (maximum of 13 seats and 5 tonnes). M&M dominated the seven seater segment with close to 40% of sales this quarter with 13,885 units, followed by Tata Motors (Safari) with 5941 units this quarter.
Industry experts attribute this growth rate to introduction of new products and variants, attractive offers and discounts and the cyclical nature of the business.
An industry analyst said, ?A buyer of a PUV is a high aspirational customer from the urban area who is not bothered by the growing interest rates. If he wants to buy a car, he will. For higher capacity UVs – the commercial utility vehicles (CUV), a nine seater or a 13 seater like the Invader or Maxx Marshall caters to small cities and rural areas – a customer relies on financing. That is why these segments have declined.?
Vaishali Jajoo, an analyst with Angel Broking, told FE, ?Auto industry is cyclical in nature. During last fiscal, the UV segment grew between 5-7% and this year, it is expected to grow at a faster pace. The launch of new variants of Scorpio and Bolero from M&M and new generation Honda CRV during late last year has resulted in good sales this quarter.?
