The price differential between petrol and diesel is Rs. 13.41 in Delhi and Rs. 13.64 in Mumbai — a drastic drop from about Rs. 25 a few months ago. This has contributed in large measure to the fall in the relative attractiveness of MUVs and SUVs.
“Our initial analysis shows that sales of SUVs, on which excise duty has been increased by 3%, have gone down by 14% in April 2013 compared to last year,” said Pawan Goenka, president, automotive and farm equipment sectors, Mahindra & Mahindra. “This is against the 24% growth in April 2012.”
The industry is divided on whether the segment will actually witness a decline in sales.
There is unanimity that even if SUVs don't go into a passenger car-like slump, the days of high double-digit growth rates may be over. “There is also a marginal shift in the market towards small sports utility vehicles," said Sandeep Singh, deputy managing director at Toyota Kirloskar Motor. "I believe their (smaller SUVs) sales will start improving after (the expected) good monsoons and during the festival season."