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Mahindra bets on crossover launches to regain past glory in SUV segment

Future passenger product launches will have both diesel and petrol variants; puts e2o electric vehicle in taxi segment

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More than two years ago Ratan Tata, then chairman of Tata Motors, famously said he is saddened for allowing Mahindra & Mahindra (M&M) take over leadership position in the passenger vehicle industry, acknowledging the rival's ability to cash in on the sport uility vehicle (SUV) segment.

But that was before Ford EcoSport and Renault Duster happened, creating the whole new category of compact SUVs, and leaving M&M blinded.

To make matter worse, as crude crashed and diesel got deregulated, petrol cars turned hot.

M&M is now hoping to regain the lost glory and lost market share by correcting its strategy readying offerings in the compact SUV to be launched next year and coming up with petrol variants, said Pawan Goenka, executive director, M&M.

"We had lost market share for not having compact SUVs in our portfolio. Our share reached 58% in the SUVs in fiscal 2013 before the launch of compact SUVs. In the current year to November it is down to about 35%. With the new launches we hope to get back to about 40%, a good share to have," Goenka said during an interaction with the media.

The three completely new platform launches include two compact SUVs and one small commercial vehicle. There would also be several refreshes for about 3-4 products, he said, declining to reveal the brands.

"All three vehicles are at a level where one can drive and get a feel. In fact, I personally drove all three last week," he said.

M&M also plans to correct the lack of petrol vehicles in its portfolio.

"We have to have more petrol vehicles available. Right now, we have nothing and all our products being sold in India are only diesel. But in our future product launches we will always have equal number of options between diesel and petrol variants in the passenger segment. My contention is that in future all cross-over vehicles would have good petrol and diesel options while full-sized SUVs would continue to be primarily diesel."

According to industry estimates, in fiscal 2013 the share of diesel cars in total sales went up to 58%. This was the year when the demand reached peak to 62% in favour of diesel in the third quarter, when the price difference between the two fuels reached Rs 32. However, in 2014-15, petrol cars are back in vogue, thanks to the shrinking gap between petrol and diesel prices.

The new offerings would come fitted with new class of petrol engine. "We had talked of 1.2 litre and 1.6 litre petrol engine coming from a platform we are sharing with Ssangyong. And we already have 2.2 litre. So, these three engines would take care of all our requirements for the petrol variant vehicles," Goenka said, adding S101 would be the first offering to have the new series of engine.

In a bid to push the stagnant sale of electric vehicles, M&M is putting the E20 in the taxi segment. The same strategy would also be followed for the electric Verito, which Goenka said would be launched in the middle of next year. "I do believe, electric version of Verito, which was spacious product would be good for a taxi ride, more so in the rental segment".

Export markets of Europe, particularly Norway, UK and France, rapidly growing markets for electric vehicles, are also being targeted.

Goenka doesn't see tractor sales improving any time soon after a disappointing November when M&M saw its sales falling by 36% at 14,207 units.

"Harvest income was not much so there would be dull December and January. Rabi crop sowing has been poor. But market for tractors may recover by March if that crop is good," Goenka, who also looks after the farm equipment division, said.

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