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.
rc-burs/nw AFPLifestyle-oil-Asia-economy-auto-SUV AFP
GetAFP 2.10 -- JUL 3, 2005 09:37:25