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LATEST NEWS UPDATES | Powered by diesel, utility vehicles sedans in sales -Ketan Thakkar

Powered by diesel, utility vehicles sedans in sales -Ketan Thakkar

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published Published on Sep 14, 2012   modified Modified on Sep 14, 2012
-The Times of India

For the first time in the history of Indian automobiles, cumulative sales of utility vehicles (UVs) have overtaken those of sedans - all three-box cars, from the entry-level to the super-luxury segment - in the first five months of the fiscal year 2012-13.

New launches such as the Mahindra XUV500, Maruti's Ertiga and Renault's Duster pulled in buyers still looking to benefit from the huge price differential between diesel and petrol, even as the overall market slows down, and the country wakes up to the arrival of UVs, be they sports or multi-utility.

Between April and August, UV sales grew by a whopping 57.03% to almost 2.08 lakh units; they now constitute a fifth of the overall market, up from 13.52% a year ago. The share of sedans in the current fiscal year's first five months stood at 18.73% with sales of a little under 1.97 lakh, a growth of 15% over fiscal 2011's April-August period.
 
The overall passenger vehicles market grew just 7.42% in these five months, to roughly 10.5 lakh units. While the UVs' slice of the pie has increased, the share of small cars and hatchbacks has fallen to under 53%, from almost 59% a year ago. Sales have dropped by 3.36% over the April-August period of fiscal 2012, purely due to the unavailability of diesel options at the entry levels.

A roughly 50% price differential in most cities between diesel and petrol has ensured - along with other factors such as perceived safety, macho looks and features like a four-wheel drive - that consumer appetite for UVs is far from sated.

The industry today is sitting on bookings of over 50,000 units of the XUV500, Duster and Ertiga. And there's a whole new army of utility vehicles readying to rumble on Indian roads over the next six months. These include the Mahindra Quanto - a smaller version of another Mahindra UV, the Xylo - Nissan's Evalia, Chevrolet's Enjoy, Ssangyong's Rexton and Ford's much-awaited EcoSport. Most of these vehicles are in the relatively affordable price bracket of Rs 6-12 lakh. The Quanto, a sub-4 metre vehicle that will avail of the excise duty benefits small cars enjoy, will allow the mini-UV to compete on price with premium compacts such as Hyundai's i20 and Maruti's Swift.

Len Curran, vice-president, sales & marketing at Renault India, says hatchbacks will dominate the Indian market for some time to come.

But Renault India's Curran does expect utility vehicles to make up a fourth of the overall market in the short to medium term. "The segment is going to explode because many of the new products on the anvil offer the comfort of a sedan and practicality of a SUV," he says.

Pravin Shah, chief executive, automotive, at Mahindra & Mahindra, reckons India is going the South East Asia way, where UVs account for 40-45% of overall sales of passenger vehicles. "Specific to India, this evolution has been led by rising disposable income, living habits and our propensity to work during the week and drive out on weekends," adds Shah. "The products today offer best possible options of seating capacity, space and versatility, among others, and there is enough choice for customers who desire to have this kind of flexibility." A section of analysts, however, cautions that the April to August spurt in UV sales may be exaggerated by the unavailability of Maruti's Swift DZire. The sedan was clocking monthly sales of 10,000 before the labour unrest at the Manesar factory upset production in July and August.

The Times of India, 13 September, 2012, http://timesofindia.indiatimes.com/business/india-business/Powered-by-diesel-utility-vehicles-sedans-in-sales/articleshow/16377637.cms


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