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Driving India: an SUV for every pocket

autos Updated: Jan 14, 2012 08:38 IST
Sumant Banerji

If you thought sports utility vehicles (SUV), the burly creatures on Indian roads that take too much space and make too much noise, were only for politicians, filmstars and rich farmers, think again.

Coming soon in India are a bevy of vehicles from the house of Maruti, Hyundai, Ford and Renault, that will fit both into your undersized pocket and your modest garage.

Developed with the idea of delivering the practicality of a small car, including manageable proportions and high fuel economy alongwith the functionality of an all-wheel SUV, these vehicles are expected to put India firmly on the global automotive map for reasons other than just small cars.

Come 2014, by when all these vehicles would hit the roads, the SUV range in India would start at a low R6 lakh and go all the way up to R1.3 crore for the Porsche Cayenne. An SUV to suit every budget.

“The compact sports utlity vehicle segment that is now being leveraged by major manufacturers holds immense potential,” said Kumar Kandaswami, senior director, Deloitte India. “This was a gap in the domestic industry that was waiting to be filled.”

India’s love for big utility vehicles, which offer a commanding view of the road and are undeterred by uneven terrains, is legendary.

“The mind of an SUV driver is very different from a small car or a sedan driver,” said Jurgen Stackmann, member of the board (sales and marketing), Skoda Auto.

“The high stance gives a overpowering view of the road. Even if you don’t go offroading, the fact that the vehicle is capable of taking any terrain instills confidence. I am not surprised India is in love with them.”

It is this fetish that has made companies like Mahindra & Mahindra, the dominant player in the sub Rs 10-lakh SUV category, a force to reckon with globally.

“This is a fast evolving market and a car in India is not only a means of utility but also represents aspirations and image,” said Shinzo Nakanishi, managing director and CEO, Maruti Suzuki India Ltd. “We have been selling so many small cars here and know these consumers would want to upgrade to a bigger car. But there is also a problem with high fuel prices and congestion in cities. A compact SUV makes sense.”

Though cluttered, the segment has already seen robust growth even as car sales have struggled. In 2011, car sales grew by only 4%, but SUV sales grew by over 13%. Combined with poorer cousins utility vehicles, they account for around 18% of the overall domestic vehicle market. That percentage is likely to shoot north as the new cars begin to make their presence felt.

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Part of this is also due to high rural demand but experts say a similar potential exists in urban centres as well. The new cars measure under 4 metres, the cut-off below which excise duties are lower in India. That makes them cheaper to own and run.

US car major Ford’s EcoSport, for example, previewed at the just-concluded New Delhi Auto Expo, is focussed at the heart of Indian industry: big cities. Billed as an SUV with the right size and right features, Ford is banking on this car to replicate the runaway success it achieved with its small offering, the Figo, nearly two years ago.

“The EcoSport was designed for markets where compact size, fuel efficiency and value are huge priorities for customers,” said Joe Hinrichs, president and CEO, Ford Asia Pacific and Africa. “Its size is deceptive. It packs in so much. It is right-sized for traffic, parking and has great fuel economy. And the right-shaped for a new generation of largely urban customers.”

Ford promises the right price as well for the tech savvy but cost conscious urban Indian commuter.

The activity would not be restricted to the lower end of the spectrum. Companies like Audi and Mercedes are bringing the Q3 and the GLC, so even the luxury segment is bustling — albeit the fact that these are cheaper in price and smaller in size.