The Hindu Business Line : SUVs set to blaze new trail

AFTER the buzz created by the `D' segment cars, it is now the turn of sports utility vehicles (SUVs) to stir up excitement in the Indian automobile market. Some companies have already launched their SUVs, while some others plan to do so in the next few months.

General Motors was the first to launch an SUV this calendar year and at the same time introduced the Chevrolet badge in the country, through the Chevrolet Forester.

The Forester has been sourced from GM's alliance partner, Fuji Heavy Industries, and is being imported as a completely built unit from Japan.

The Forester is available at an ex-showroom price in Delhi of Rs 15.60 lakh.

Maruti Udyog Ltd and Hyundai Motor India Ltd also plan to launch SUVs, all in the Rs 20-lakh range.

Maruti will bring in the Grand Vitara XL-7, imported as a completely built unit from its parent, Suzuki Motor Corporation, in Japan.

The Grand Vitara XL-7, priced at about Rs 20 lakh, comes with a 2.7-litre petrol engine and is expected to be launched within the next two months. Likewise, Hyundai Motor India plans to launch its SUV, Terracan, in April.

The Terracan will be priced in the Rs 18-22 lakh range and is expected to sport a 2.5-litre turbo diesel engine, with a petrol variant to be launched later.

Hyundai Motor India will take up local manufacture of the Terracan if volumes justify it.

According to industry experts, the success of the Scorpio from Mahindra & Mahindra, and the Toyota Qualis, and vehicles like the Sumo and the Safari from Tata Engineering has clearly showed that there is a market for utility vehicles in the country.

However, the SUVs being imported as fully built units are meant for a much smaller market because of their prices.

They are targeted at upwardly mobile customers who like to spend money on vehicles. More importantly, a premium SUV buyer will be one who is well-travelled and has seen or driven these vehicles abroad.

Mr Vinay Dixit, Vice-President (Marketing, Sales & Aftersales), General Motors India Pvt Ltd, says that the premium SUV buyer is well-travelled, primarily male, 30-45 years old, and with "an active disposition towards life".

According to a Maruti spokesman, SUVs are popular the world over for the status and prestige, comfort, luxury interiors, and ultimate safety.

Typically, they are targeted at large business houses, plantation owners, sports people, and film stars.

The Grand Vitara XL-7 underwent an upgrade by Suzuki last November. This will be the first model to be launched by Maruti after Suzuki took over management of the company in May 2002.

The experts say that the Indian automobile market has begun to emerge with various segments, and is very similar to that in more mature markets.

Therefore, launching SUVs is the next step in this process of evolution. The SUVs are both lifestyle and utilitarian vehicles, and are attractive to buyers for their on-road and off-road driving characteristics. It is typically meant for those who travel during the weekends with their families.

Car manufacturers are not willing to hazard a guess on how big the SUV market in India is. It is just like the `D' segment, they say.

Mr Dixit says that the premium SUV market has only recently started developing in the country and is made up of vehicles with good brand equity around the world.

"At this stage, we expect the segment to have a volume of around 2,000 units, but feel that there is a high growth potential."

The manufacturers agree that there is not space for too many players in this segment, but companies launching their products early have the first-mover advantage.

A critical success factor of the product will be the heritage of the products being launched.

Since these customers are well-travelled, they will be aware of the international trends and only the latest and the best will work for them, according to Mr Dixit.

Will the SUVs eat into the sales of the `D' segment cars? Demographically, the `D' segment cars and the premium SUVs target the same customer, so there is bound to be some diversion, he adds.

"However, psychographically the customers are quite different and that may help in expanding the overall market as more choice becomes available." Other manufacturers feel that a `D' segment buyer will go in for a utility vehicle only as an additional vehicle and not as a replacement.

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