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High-end SUVs To Turn Cheaper

By Motortrend India Staff   |   11 July,2010

Luxury Sports Utility Vehicles are likely to become cheaper in the Indian market, as global car manufacturers plan to assemble them in India. Car manufacturers like BMW, Audi, Tata-Land Rover, Hyundai, and Volkswagen are planning to assemble their SUVs in India and bring the prices down to sub-Rs 30 lakh price band.

Currently, their high end SUVs are priced around Rs 40 lakh-plus, which is due to 110% import duty on CBUs. But if the components are imported and assembled in India, it will incur 65% duty.

The trend was started by Toyota which brought its Fortuner SUV, which has captured almost two-thirds market share in the first year of launch.

“Fortuner sales have gone much beyond our expectations and its success has forced us to look at new products in the segment, ” said Sandeep Singh, deputy MD (marketing), Toyota Kirloskar.

This trend would start a price war in the SUV market, as Indians prefer feature loaded competitively priced products. BMW is all set to bring in its X1 at a price that will make it the cheapest in the German luxury carmaker’s portfolio.

“Like our locally assembled car series 3 & 5, this SUV would target the high end customer looking for a great value preposition, ” Peter Kronschnabl president of BMW India said.

Besides BMW X1, some of the other topline SUVs that may be assembled in India include Audi Q3, Volkswagen Tiguan, Renault Koleos and Land Rover Freelander. Audi started the assembly of its SUV Q5 last week at its Aurangabad facility.

The SUV segment has become one of the fast growing segments in the luxury car market. The new line up of SUVs would compete with existing ones like Honda CR-V, Nissan X-Trail, Mitsubishi Outlander, Ford Endeavour and GM Capitva.

“There aren’t any great SUV marquees in the Rs 25-30 lakh price band so there is a market opportunity, but car makers will have to offer best of products at aggressive prices, ” a Mumbai based MNC auto analyst said.

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