Mahindra to launch two new SUVs to arrest falling market share

Mahindra & Mahindra (M&M) plans to launch two new SUV products over the next two years in order arrest the fall in its market share, said Pawan Goenka, Managing Director of M&M in an analyst meet according to a Kotak Institutional Equities report. 

The two new cars will be designed by Detroit technical center and Ssangyong team in conjunction with Mahindra's Research team in Chennai.

The two new launches are expected to capture the gaps in the product portfolio of Mahindra. The first launch will be an multi purpose vehicle (MPV), which will be launch to compete with Maruti Suzuki Ertiga, said Hitesh Goel and Nishit Jalan in the report. The MPV is expected to be launched by the second half of FY18.

The other car launch by Mahindra will be a modified version of the SsangYong's Tivolo SUV, which has been successful in Korea.

While Mahindra is still at No.3 spot in the market, its market share has declined from 9.68% in February 2016 to 7.53% in February 2017, according to data from the Society of Indian Automobile Manufacturers (SIAM).

Furthermore, the company accepted that its recently launched compact SUVs (the KUV100 and TUV300) have not met management’s expectations, said the report. But the company has takencorrective actions to redesign these vehicles, said the report.

“The management expects KUV100 and TUV300 volumes to double from its current run-rate over the next one year, which was the company’s initial target when they launched these vehicles,” the report further said,

Mahindra also believes transitioning to BS-VI from BS-IV will be a major challenge for them and they will have to do a major product overhaul.

They indicated Scorpio cost will increase by Rs 60,000- Rs 1 lakh post implementation of BS-VI depending on the localisation levels achieved for catalytic converter and diesel particulate filter.