says Pradeep Saxena, Head of Automotive Research, TNS India
As in previous years, the 11th edition of the Delhi Auto Expo which took place last month attracted a crowd of over 100,000 on peak days. The one big difference from past editions however, was in terms of the models being displayed which stand a good chance of being launched in India.
The Indian car market is dominated by both small size and small price vehicles
The popularity of the small-car segment on the Indian market is well known. What is less understood though is that small doesn?t only translate into size but also into price: whatever car model is available for a small price flies off the shelves.? As a result, the Suzuki Dzire, a sedan which sells at US$ 12,000, and the Mahindra Bolero, a MUV priced at US$ 14,000, consistently feature among India?s top 10 best selling cars, despite neither of them qualifying as small-sized cars.
Every major car manufacturer - with the exception of Mahindra - has a small hatchback and at least one successful sedan in its portfolio; however few are those who offer a SUV or MUV worth raving about.
The 2012 Delhi Auto Expo showcased a surprisingly high number SUVs and MUVs
The most successful models in India?s currently under-developed (yet fast-growing) SUV market, range from US$ 21,000 for the Tata Safari or Mahindra Scorpio, to US$ 48,000 for Toyota Fortuner.
The Auto Show this year revealed a first-time interest for global car makers in the lower-price band: Ford (EcoSport) and Maruti Suzuki (XA Alpha) both displayed SUVs priced at around US$ 20,000, with the launch of the EcoSport scheduled for early 2013. Meanwhile Indian manufacturers are set to venture into the mid-price band; Mahindra is planning to launch its SsangYong?s Rexton which will sell at around US$ 36,000.
Among the MUVs unveiled last month, the Stile by Ashok Leyland and Ertiga by Maruti Suzuki will both hit the Indian market at around US$ 20,000. ??
So, what is spurring carmakers to focus on SUVs and MUVs?
Car manufacturers are relying on India?s multi-generational households to fuel growth
Almost half of Indian car-buying households either purchase an additional vehicle or replace an existing one ? and 15% of these households opt for a SUV or MUV.
India is a country where multi-generational households continue to prevail, as Oprah Winfrey found out during a recent visit: she was astonished to learn that Abhishek Bachchan, one of India?s biggest film stars, still lived with his father - even after marriage!
Such a household obviously needs to purchase a larger vehicle to accommodate a higher number of passengers.? When buying an additional car - be it for a family or individual need - the combined disposable income of its members also means that it can actually afford a SUV or MUV. As most of these models come with diesel engines, their lower running costs make them even more accessible.
However, for most Indian middle-class households, US$ 20,000 remains the maximum amount which they?re prepared to spend on a new vehicle.
Whether car manufacturers succeed in luring them into breaking this ceiling, with the launch of these attractive SUVs unveiled at the Delhi Auto Expo, remains to be seen??
Source: http://blogs.tnsglobal.com/tns_automotive/2012/02/big-is-beautiful-too.html
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