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Amid Rising Fuel Prices, Cars With Lower Running Costs Likely To Gain Higher Traction Among Buyers: Report

Considering the fact that 70% of the passenger vehicles market in India is still accounted for by vehicles costing less than Rs 10 lakh, the development augurs well for market leader Maruti Suzuki India Ltd (MSIL)

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With fuel prices going up by 35% over the past 15 months thereby impacting overall vehicle running costs, cars that have higher fuel efficiency and lower maintenance costs are expected to gain higher traction among buyers in India, specially in the sub-Rs 10 lakh category, according to a report.

Considering the fact that 70% of the passenger vehicles market in India is still accounted for by vehicles costing less than Rs 10 lakh, the development augurs well for market leader Maruti Suzuki India Ltd (MSIL), said the report by HSBC Global Research.

"Over the past 15 months, fuel prices have gone up 35%, impacting overall vehicle running costs...Our channel interactions suggest that customers are increasingly becoming considerate of the recent rise in fuel prices," it said.

Citing the example of Maruti Suzuki's Swift petrol, the report said for a 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 the current environment, we believe cars that have higher fuel efficiency and lower maintenance costs should gain realtively higher traction among buyers, especially in the less  than Rs 10 lakh category, which is still 70 per cent of the  market in India," it said.

(PTI)


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