Higher Fuel Costs Boost Small Car Demand

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Higher Fuel Costs Boost Small Car Demand

Rising oil prices are encouraging more car buyers worldwide to consider smaller, more fuel-efficient models.

The trend is likely to be pronounced in New Zealand where fuel pump prices will be hit hard by not only more expensive oil, but by an increase in fuel tax levy from April.

Suzuki Motor Corporation, a carmaker with a reputation for designing and building economical motor vehicles, raised global production in January by 9.6 per cent.

Higher oil prices were enticing more people to choose vehicles with smaller engines, said the company.

"Demand for smaller cars and environmentally-friendly vehicles that the Japanese automakers are good at producing will continue to rise," said Makoto Sakuma, a spokesperson for the large Asahi Life Asset Management Company in Tokyo.

Suzuki, Japan's fourth largest carmaker, manufactured 165,557 vehicles in January and domestic production rose by 23.5 per cent to 87,379 units.

The increased emphasis on fuel consumption came just as Suzuki was launching the new, economical 1.5 litre Swift in New Zealand.

"New Zealand and Australia are the first export territories to receive the highly efficient new generation Swift and it could not have come at a better time," said Tom Peck, General Manager of Marketing for Suzuki New Zealand.

At the recent launching of the new model, he said Suzuki was targeting to sell 1,850 new cars on the local market in 2006 – a 37 per cent increase on sales last year.

"Demand for small cars in New Zealand rose last year, and this trend is likely to accelerate on the back of higher oil costs and rising fuel taxes," said Mr Peck.

In the official fuel test ratings, the Swift achieves 5.9 litres/100 km (47.9 miles per gallon) in the extra urban test, and 7.0 litres/100 km (40.3 mpg) in the combined cycle that includes both city and open road motoring.

Suzuki's most economical model sold in New Zealand, the one litre Alto five-door hatchback, returns a remarkable 4.3 litres/100 km (65.7 mpg) in the extra urban test and 5.4 litres/100 km (52.3 mpg) in the combined cycle.

The Suzuki Motor Corporation has been profitable for 56 consecutive years – a remarkable achievement in the motor industry.

Last year Suzuki shares outperformed other domestic motor manufacturers in Japan, gaining 3.8 per cent.

In addition to the new generation Swift, Suzuki is to introduce two other global models by 2007.

"Suzuki is clearly building products that are suitable for world markets, and up to seven new models will be launched by the company during the next five years," said Tom Peck.

World-wide Suzuki expects to sell 9 per cent more new cars this year than in 2004. During the past nine months Suzuki sales in Asia have increased by 18 per cent while Suzuki motorcycle volume has leapt by 46 per cent.

Despite a sharp sales rise in the United States last year, demand for new Suzukis increased by a further 15 per cent in January, with the continued success of the Grand Vitara XL-7 reflected in the 35 per cent sales lift for the month.

Suzuki now has plants in 23 countries and markets its cars and commercial vehicles in 144 nations. It is the top selling brand in Hungary, India and Pakistan.

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