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November 30, -0001

Coimbatore: The demand for premium sports utility vehicles (SUVs) will continue to grow despite the overall slowdown witnessed by the automobile sector as these are aspirational purchases, according to a senior executive of Isuzu Motors India Pvt Ltd.

He expected the demand for diesel vehicles to remain robust despite the narrowing of price difference between diesel and petrol vehicles because of certain favourable features of the diesel vehicles.

Robust demand

Speaking to Business Line on the sidelines of the launch of Isuzu MU-7 SUV in Coimbatore today, Toru Kishimoto, Vice-President, Vehicle Sales Division, Isuzu Motors, Chennai, he said though the overall demand for the automobiles remained muted this year, the demand for premium SUVs has been robust.

Similarly, the demand for pick-up vehicles, of the likes produced by Isuzu, has continued to be strong.

He said the demand for premium SUVs — the likes of Isuzu’s MU-7 and Toyota’s Fortuner — was driven by multi-vehicle owners seeking to upgrade to bigger or more powerful models.

Market size

He said the market size of premium SUVs was estimated to be around 25,000 units annually in India (in the ex-showroom price range of Rs 20-25 lakh).

Toru Kishimoto said Isuzu was known for its high quality diesel technology offering high fuel efficiency and long life. The MU-7 model was also “the longest in its class’’ offering customers “the luxury of space’’ providing high comfort for long rides.

Removal of diesel subsidy

Asked about the impact of removal of diesel subsidy on demand for diesel vehicles in India, Toru Kishimoto said compared to a petrol engine, the life of a diesel engine was longer. On the mileage front too, diesel vehicles scored over the petrol models.

When asked whether the Indians’ preference for diesel vehicles would persist even after the diesel price was completely deregulated, he said: “Yes, we think so.’’

Expansion of dealer network

On the expansion of dealer network of Isuzu Motors, he said at present the company had three outlets — Hyderabad, Coimbatore and Chennai and this would go up to eight with the opening of dealerships in Madurai, Visakhapatnam, Tirupati, Kochi and Bangalore next month.

The company has planned to concentrate on the Southern market initially and when commercial production began in its own factory in 2016, it would expand the dealer network to 60 cities. This would be increased to 160 outlets when the full production is achieved by 2018-19.

The company would have the SUV and the pickup D-Max with 3 variants in its initial portfolio.

Isuzu’s new factory

Toru Kishimoto said the ground-breaking ceremony for Isuzu’s Rs 3,000-crore factory to come up at Sri City in Andhra Pradesh was likely to be held next month and production scheduled to commence during early part of 2016-17 financial year.

The initial production capacity would be 50,000 units which would be scaled up to 1.2 lakh units by 2018-19.

The company will produce both MU-7 SUV and pick-up vehicles at the new plant. Starting with 70 per cent localisation, the company would achieve 100 per cent localisation when the full targeted volume of production is achieved.

While SUV comes with a price tag of Rs 22-24 lakh ex-showroom, the pick-up vehicle carries a price tag of Rs 6.65 lakh ex-showroom with price variation depending on the model. The pick-up would be unveiled at the Delhi Auto Show in February and launched shortly thereafter.