Car honchos compete to rein premium SUV segment

Premium SUV segment i.e. above Rs 15 lakh was for long occupied by few players in India. But recent launches by car honchos have led to a war as to who will lead the premium SUV segment in India. With entry of more players in a spree to launch new cars, the upper SUV segment (above Rs 15 lakh) is gathering momentum. About 10 OEM (Original Equipment Manufacturer) players have entered the premium segment over the past six years.

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The upper SUV segment (above Rs 15 lakh) registered total sales of 11,734 units during first five months of this financial year compared to 9,375 in the same period previous year, showing a rise of 25%.

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The recent launch of Renault Koleos SUV priced at Rs 23 lakh (ex-showroom, New Delhi) is being looked as a trend-changer in Indian car market. It was believed by car experts that players like Audi and BMW are enough to hold this segment and small players would not dare to take such a risk. Audi, which has been registering strong growth in the upper premium category (above Rs 25 lakh) has almost doubled its volumes to 824 units during April-August 2011 period compared with 432 units last year. Even, BMW’s X1 cloaked a sale of 1,543 units. Volume drivers like Toyota Fortuner (priced at about Rs 20.5 lakh) and Ford Endeavor clocked sales of 4,358 units and 1,138 units respectively. But Koleos launch has down-stated all the predictions and challenges.

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Actually rising income levels, easier access to credit and a simple fact that whole new range of models are being introduced by car giants, is driving lot of action among the SUVs in India. Vivek Nayer, senior vice president-marketing, automotive sector at M&M said that the key driving factors in the SUV segment is the changing lifestyle and growing aspirations of affluent Indians who would like to venture out with family and friends and SUVs are proved to be an ideal vehicle for them with lots of space and safety features.

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The powerful players in lower range SUV segment, M&M and Tata Motors with the acquisition of Land Rover (by Tata) and Ssangyong (by M&M), are now in a position to deviate to the premium-end of the SUV segment. M&M with over 60% share in SUV market, is gearing up to launch its high end SUV (code named XUV500) by the end of this year and the launch will see the company addressing a new segment. Up till now, the company offers Mahindra Bolero, Mahindra Scorpio and Mahindra Xylo — up to the price point of Rs 11,00,000. M&M is also planning to launch two premium SUVs of Ssanyong — Rexton and Korando — by middle of next year.