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Car firms put SUV launches in top gear

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Customers now have many reasons to look beyond luxury sedans.

On Tuesday, Land Rover will launch Freelander 2, its compact sports utility vehicle (SUV), in India. Expected to be priced at Rs 35 lakh (net of taxes), it will be the cheapest Land Rover in the country.

But Tata Motors (owner of the British marquee brand) may be termed a late entrant in the Great Indian SUV carnival. Last week, the country saw the launch of two SUVs – the new version of Ford Endeavour and the Nissan X-Trail Earlier this month, German car maker Audi began selling an upgraded version of the popular Q7SUV, priced between Rs 53 lakh and Rs 1 crore.

The carnival was kicked off by Toyota with its Rs 18.45 lakh Fortuner diesel SUV. The rush for it was so much that the company was forced to ask dealers to stop taking new bookings. Since then, the auto giant has increased production by 50 per cent and is hoping to sell 4,500 SUVs by the end of next year, giving it a 50 per cent share of the mid-market SUV segment. THE CAR-NIVAL BEGINS * The carnival was kicked off by Toyota with its Rs 18.45-lakh Fortuner diesel SUV * Last week, the country saw the launch of two SUVs — the new version of Ford Endeavour and the Nissan X-Trail * Earlier this month, German car maker Audi began selling an upgraded version of the popular Q7SUV * On Tuesday, Land Rover will launch Freelander 2 * Nissan is already planning to launch its expensive Murano, a mid-size crossover SUV * Tata Motors is readying for a completely new vehicle based on a new platform, while M&M plans to launch a premium SUV by 2010-11

The launch party is surely going to be a long one. Nissan is already planning to launch its expensive Murano, a mid-size crossover SUV that offers the riding comfort of a car while carrying the macho looks of an SUV. The home-grown players also aren’t far behind. While Tata Motors is readying for a completely new vehicle based on a new platform, Mahindra and Mahindra (M&M) has committed to a premium SUV by 2010-11.

Pawan Goenka, president (automotive) at M&M, says: “We currently have a market share of about 65 per cent in the entry SUV segment and we need to continue to innovate if we have to maintain our lead.”

The new SUV will debut in the last quarter of 2011 and will be made at Chakan (near Pune). It will be positioned a notch higher than the flagship Scorpio and is being built on a completely new platform at a cost of Rs 700-800 crore, excluding the cost of the plant, Goenka says.

But is the market big enough to justify such a frenzy? Currently, the combined market for the mid-segment (Rs 15-30 lakh) and premium (Rs 30 lakh and above) SUVs is just about 12,000-13,000 units. Not a huge number, but experts say demand for this class of vehicles has covered quite a distance after Tata Motors launched the country’s first indigenous SUV, the Sierra, way back in 1991.

Analysts say the SUV market holds the potential of growing fast in the long term, with the road network getting better and more and more people driving across cities. The launch of new models and the buzz it creates will put SUVs on the super-fast track, they say. ANALYSTS’ VIEW * The SUV market holds the potential of growing fast in the long term, with the road network getting better and more people driving across cities * The mid-segment market, which has a size of 10,000 units at present, has been growing at about 25 per cent a year * The premium segment with players such as BMW, Mercedes, Audi, Porsche, Volkswagen and Toyota has recorded an even higher growth

 

Experts say the mid-segment market, which has a size of 10,000 units presently, has been growing at about 25 per cent a year (except for last year, when demand collapsed across segments) . And, the premium segment (3,000 units), where players such as BMW, Mercedes, Audi, Porsche, Volkswagen and Toyota operate, has recorded an even higher growth.

“We have two kinds of customers — utility-driven ones who buy an SUV because of necessity (for space) and desire-driven ones who own it for the value attached. In India, thankfully, the second kind of customer is growing fast,” said Ashutosh Dixit, GM-sales, SkodaAuto India.

The “desire-driven” customers now have many reasons to look beyond luxury sedans. Apart from their imposing exterior looks, modern day SUVs provide a host of comforts such as four-zone auto air-conditioning system, 14 speakers and an eight-inch display theatre, cruise control, refrigerator, sun roof, power seats etc.