The US based global car manufacturer, General Motors has announced its plans of developing a compact SUV, a move that most of the Indian auto OEMs are adopting now. At the 2012 Auto Expo that took place in Delhi, GM’s competitor Ford displayed its compact SUV, the EcoSport that garnered huge interest from the public. The country’s largest car maker, Maruti Suzuki which is known for its small cars also showcased its concept compact SUV, the XA Alpha. French manufacturer is also eyeing this segment with the Duster SUV.
“There is an opportunity for us to do a small sports utility vehicle. Indian consumers are looking for is a small nimble and efficient SUV. I think we need to go where the market is headed,” Lowell Paddock, president and managing director, General Motors India, said.
The compact SUV market is new niche segment that the OEMs are targeting. According to many, the compact SUV is the perfect vehicle for the young urban population who wants fuel efficiency ad also some sport at the weekends. The compact SUVs are powered by smaller engines, usually of 1 to 1.5 litre engines compared to the big burly SUVs that are powered by 2 or 3 litre engines. The use of such engines does attract a considerable fuel efficiency figure. They also fall the attractive price bracket of Rs. 7 to 10 lakhs which makes them such an attractive investment.
The move to enter into the compact SUV segment by GM comes at a time when there is a likelihood of Government slapping an additional excise duty of Rs. 80,000 on diesel vehicles. Oil Minister Mr. Jaipal Reddy has already proposed the Finance Minister Mr. Pranab Mukherjee to slap the additional duty on diesel vehicles. The oil companies are also lobbying on similar lines to the Finance Ministry. GM is likely to jointly develop the SUV alongwith its Chinese partner, Shanghai Automotive (SIAC). With the situation in a real dilemma right now, GM would have to chalk out its strategy very carefully to take benefit of entering into this niche market segment.
