RISING SUV SALES - A PARADOX OF OUR TIMES

By Ruma Dubey

Avinash just got a pay hike. He is two years old in this swanky new investment firm and he is on a high. He has gone ahead and booked a SUV, the coveted Mahindra & Mahindra XUV 500. On other hand, his father has been in service, for the past 25 years and he owns a Maruti Wagon R and very happy with the acquisition too. But for Avinash the Wagon R is a bone of contention as he feels that it is too small. Too small for a family of four? What he means is ‘small’ in terms of stature. He is doing well in his career, earning a very good salary and feels that the Wagon R is not the right representation of his rising status.

And this is the reason why, like Avinash, many youngsters are opting for SUVs, the monthly sales figures of SUV shows a consistent rise while that of small cars is either stagnant or on the descent. M&M’s XUV 500 is sold out for four months and company has decided to increase production from the current 3000 units per month to 4000 units from May 2012. Toyota’s SUV, Fortuner is sold out for around 6 to 8 months.  Ditto is the case for most of the SUVs.  Currently SUVs and MPVs or multi-purpose vehicles account for 15% of the total passenger car market in India and this is expected to go up to 25% over the next 3 years.  15 new models for SUVs are expected to hit the roads this year and all are in the fray – Hyundai, Ford, Renault, Nissan, Tata Motors, M&M,

This craze for SUVs in a country like Dubai is understandable as fuel there is cheaper than water. But in a country like India, where fuel costs are rising and expected to go up further, interest rates are high and EMIs burn a hole in the pocket, this lure for SUVs makes no economic sense.  Yes, most of the surge in SUVs is for diesel vehicles only but what about the dagger hanging of an 10% additional duty on passenger diesel cars? Unmindful of all this economic sense, the demand for SUVs just soars.

Surely, the reason is beyond economics. It is more about creating a perception of oneself. Just as a Nano could not take off purely because it was ‘perceived’ as a car for the poor, SUVs are booming because they are perceived to be a symbol of higher status, a vehicle which announces that ‘you have arrived’ in life.

Yes, there are other reasons too – higher seating capacity, SUVs are safer as they are larger and heavier, higher cargo capacity, can tackle the potholed roads better than a small car and maybe, it is good when going traveling off the beaten track.

But these are all reasons to justify the choice of a SUV. Yes, the real reason is that people in India buy an SUV today simply because they know and want to exhibit that they can afford to buy a SUV. They buy simply because they can. Surely with families becoming smaller, cars should have ideally got smaller but today, smaller families have bigger homes and bigger cars. Like America, India is unfortunately fast moving towards consumerism. Every buy is today driven by this need to ‘show’ rather than about practicality. Strangely, this new generation, which is buying SUVs is stated to be environmentally conscious so then how come they opt for gas guzzlers like SUVs? Or is being selectively ‘environmentally friendly’ also about creating an image, being ‘cool’.

Just as the automobile sector is a reflection of the economy, the buy and sell pattern is a reflection of cars and is also a reflection of the attitude of people. And today, we have thrown away economic and logical sense, purely ruled by the need to satisfy our senses.

This is the paradox of our times. As said by Dalai Lama, “We have bigger houses and smaller families; more conveniences, but less time; we have more degrees, but less sense; more knowledge, but less judgment, We've been all the way to the moon and back but have trouble crossing the street to meet the neighbor. We built more computers to hold more information to produce more copies than ever but have less communication. We have become long on quantity but short on quality.”