As driving vehicles is getting increasingly unfeasible as fuel prices have become dearer by 35 per cent since July 2020, only cars with greater fuel efficiency and low maintenance cost are expected to attract more buyers in the country, mainly those priced under Rs 10 lakh category, according to a report by HSBC Global Research.
The report says that more than 70 per cent of passenger vehicles fall under the sub-Rs 10 lakh category in the country and the prevailing situation suits market leaders like Maruti Suzuki India Limited (MSIL).
“Over the past 15 months, fuel prices have gone up 35 per cent, impacting overall vehicle running costs. Our channel interactions suggest that customers are increasingly becoming considerate of the recent rise in fuel prices,” it said.
Giving Maruti Suzuki's Swift petrol model's example, the report noted that compact passenger vehicle fuel now accounts for around 40 per cent of the vehicle's life-time cost compared with 30 per cent in mid-2020.
In such a scenario, it noted that cars with higher fuel efficiency and lower maintenance costs and which cost less than Rs 10 lakh will gain greater traction among buyers.
It further added that both in absolute terms and competition-wise, Maruti Suzuki remains market leader in fuel efficiency and total cost of ownership.
MSIL has 65 per cent market share in less than Rs 10 lakh price category vehicles, the HSBC report further said.