Asians cling to beloved SUVs despite rising oil prices

Asians cling to beloved SUVs despite rising oil prices

Roberto Coloma
Agence France Presse/Singapore

Move over, slow drivers. A busy mom with a monstrous turbocharged
truck, a long grocery shopping list and a wailing child strapped
to the back seat is looming right behind you.

Gas-guzzling sport utility vehicles (SUVs), the carrier of
choice among fashionable urban women and affluent families,
remain highly popular across the Asia-Pacific region despite
soaring oil prices.

From the smart streets of Singapore to the dangerous alleys of
Manila, imposing SUVs with race-ready engines and enough luggage
space for a serious mountaineering expedition tower over everyday
traffic.

Never mind that in many cases their body paint gleams like
nail polish, the toughest obstacles they face are speed bumps in
a car park and the farthest they've ever travelled is a picnic
grove in the suburbs.

Manufacturers and industry analysts say most SUVs now sold in
the region are mid-priced, passenger car-based models produced by
Asian companies such as Toyota, Nissan, Mitsubishi, Isuzu,
Suzuki, Subaru, KIA and Hyundai.

But for those who want real road respect, nothing less than a
Volvo, Land Rover, BMW, Lexus or Porsche four-wheel-drive will
do.

In the Philippines, wealthy people fearful of being kidnapped
or carjacked find massive SUVs a necessity, not a luxury.

"When someone blocks your path, you can just ram him over," a
prominent Manila businesswoman told AFP. "Paying for rising oil
prices is still cheaper than paying ransom or buying a new car
because someone took yours at gunpoint."

In the politics-mad Philippines, SUVs are not just symbols of
affluence but blunt instruments of power as they navigate the
congested and potholed streets of the capital, which suffers from
seasonal flooding.

Among politicians and businessmen, one of the most popular
models is the Ford Expedition, usually sporting darkly tinted
windows.

The ultimate power trip is to be in a VIP convoy of SUVs
heading against normal traffic flow -- no Filipino traffic cop
earning less money per week than the cost of a tank of gasoline
would dare stop them.

Auto industry expert Graeme Maxton, a director of research
firm Economist Intelligence Unit based in Hong Kong, does not
expect 60-dollar crude and the resulting higher pump prices to
have an immediate impact on Asian SUV sales.

Higher fuel prices are going to lead to more inflation and
less investment "rather than a major change in the makeup of
vehicle sales", he told AFP.

"Looking two or three years out, there is an incentive for
governments to begin to push small vehicle sales," he said. "When
you get tax incentives and penalties for gas guzzlers, then
perhaps the market will shift."

In Bangkok, legendary for its traffic woes, SUVs are seen as
status symbols, like the latest mobile phones.

"Sales of our SUVs have not dropped at all, we still deliver
around 1,000 SUVs to our clients every month and bookings also
have not dropped," said a company official at Toyota Motors in
Thailand.

"For people who can afford more than one million baht
(US$25,000) cars, oil price is not a factor. They decide to buy
SUVs because of their design and utility rather than fuel
consumption."

In Jakarta, as in Manila, SUVs do what they're designed for,
enabling drivers to navigate poorly maintained highways and
periodic flooding.

For ordinary Indonesians who can't afford imported SUVs, the
homegrown "Kijang" multi-purpose vans are hugely popular.

In Malaysia, where offroad motoring is a niche sport, SUVs are
more popular as urban vehicles for comfort and safety reasons.
And while some imported SUVs are expensive status symbols,
locally-assembled models at around 115,000 ringgit (US$30,000)
are still within reach of a middle-class family.

While SUV sales are still on the increase, Shalyzan
Shamsuddin, a sales executive for dealership Naza Kia, said
Malaysians were very conscious of the cost of fuel consumption
and sales may be affected eventually.

Over the long term, however, the macho, fuel-thirsty SUVs
which first became popular in the U.S. market are giving way to
more practical models which still look rugged outside but are in
touch with their feminine side.

Eiji Kawahara, a Tokyo-based auto analyst for JP Morgan, said
the SUV market was shifting to "crossover" models which provide
better fuel efficiency and are easier to drive.

Hybrid models combining petrol and electric motors have also
been developed for SUV lovers with an environmental conscience.
In Australia, where motorists do have a continent-sized country
to explore, sales of SUVs remain strong.

The most recent figures show that total SUV sales were up 12.1
percent overall for the first five months of the year. For the
month of May alone, sales were up 16.6 percent from a year ago.

"There's precious little evidence in the marketplace in
Australia to date to suggest that the impact of higher oil prices
of petrol prices is significantly deterring consumers from the
SUV market," Federal Chamber of Automotive Industries spokesman
Andrew McKellar told AFP.

"It's more a lifestyle than a strict off-road vehicle," he
said.

A spokesman for the Japan Automobile Dealers Association said
that unlike models produced 10 years ago, "the current models of
SUVs have become very fuel efficient".

"We have yet to compile sales data on SUVs for June but we can
say the sales figures will not be affected by oil prices," the
spokesman said.

In May, 15,232 units of SUVs were sold, up 24.8 percent from
April. On a year-on-year basis, the May sales surged 47.3
percent.

Yasuo Yamamoto, a senior economist at Mizuho Research
Institute, said: "In the U.S. market, high oil prices will
directly affect sales of SUVs as U.S. households spend more on
gasoline than Japanese households do."

More fuel-efficient models could provide "an opportunity for
the Japanese makers to expand their SUVs shares in the U.S.
market", Yamamoto said.

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AFPLifestyle-oil-Asia-economy-auto-SUV
AFP

GetAFP 2.10 -- JUL 3, 2005 09:37:25