Car makers unaffected by diesel price hike

A hike of Rs 5 in the price of diesel has not curbed the enthusiasm of utility vehicle (UVs) makers, who are set to launch six SUVs and multi-purpose vehicles (MPVs) in the next six to seven months.

Mahindra & Mahindra (M&M), Tata Motors, Nissan, Ford and General Motors are in the process of blueprinting the launch plans for these vehicles, most of which will be priced in the affordable bracket of Rs6-12 lakh.

"We are upbeat about the growth of UVs. The diesel price increase may have some immediate impact, but we are very hopeful that the festival season will help boost sales," says Takayuki Ishida, MD & CEO, Nissan Motor India.

Later this month, Nissan will launch the Evalia, which Ishida calls "an urban-class utility vehicle." "Despite the price hike, we will go ahead with our planned launches," says Pawan Goenka, president, automotive at M&M, India's largest utility vehicle maker. Related: Nissan Evalia all set for launch end of September

"If at all there is an effect of the price hike, it may be of people switching back to petrol hatchbacks and entry level sedans; but this won't happen in the UV space as there are hardly any petrol alternatives," adds Goenka.

In a few days M&M will launch its compact SUV, the Quanto, which will be aggressively priced to compete with premium hatchbacks like Hyundai's i20 and Volkswagen's Polo.

A month or two later, M&M will crank up the Ssangyong acquisition by launching the Rexton W, a premium SUV from the stable of the South Korean automaker for which the Mahindras had emerged the preferred bidder two years ago.

Expected to priced at roughly Rs20 lakh, the Rexton W will be the only premium SUV to hit the market in the next six months. In October, Tata MotorsBSE 2.72 % will launch the new Safari Storme, built on the Aria crossover platform.

By March 2013, the Detroit majors are expected to get into the act with Ford lining up the EcoSport mini SUV and General Motors the Enjoy, an MPV from its Chinese partner, SAIC Motor Corp. P Balendran, vice-president, General Motors India, says the company will not delay the launch of its MPV because of the price hike.

An industry official on the condition of anonymity estimates that these new launches will bring 1.2-1.5 lakh additional UVs onto Indian roads over the next 12 months. Currently, some 1.8 million UVs are estimated to be running on Indian roads.