As fuel prices rise, cars with low running cost may gain more popularity: Report
As fuel prices in the country have gone up by 35 per cent over the past 15 months, it has majorly impacted the overall running costs of vehicles. In such a scenario, cars that have higher fuel efficiency and lower maintenance costs are likely to gain higher traction among buyers, specially the cars in the sub- ₹10 lakh segment, as per a report by HSBC Global Research.
The research report further stated that since 70 per cent of passenger vehicles market in the country is still accounted for by vehicles costing less than ₹10 lakh, market leader Maruti Suzuki India Ltd (MSIL) will likely see more development and popularity.
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The report cited the example of Maruti Swift petrol, saying that for a compact passenger vehicle fuel now accounts for around 40 per cent of the vehicle's life-time cost as compared with 30 per cent during mid-2020. “Our channel interactions suggest that customers are increasingly becoming considerate of the recent rise in fuel prices," it stated.
Further elaborating on how Maruti Suzuki will fare well in the current fuel price crisis, the report stated that the carmaker continues to score well in this regard. "In our analysis, both in absolute terms and relative to competition, MSIL remains the market leader in fuel efficiency and total cost of ownership."
The automaker's competitive positioning will likely remain compelling as it has around 65 per cent market share in the less-than- ₹10 lakh price category, which will likely gain more traction in the current scenario. Further, Maruti vehicles' fuel efficiency has improved by 15-30 per cent in the past 10 years, the report stated. It cited examples of fuel efficiency of Maruti Swift and Swift Dzire, which was 18 km per litre (kmpl) nearly 10 years back and is 23.3 kmpl currently.
(with inputs from PTI)