In the last one year utility vehicle segment has been on a continuous decline and most of the growth in volumes in the segment has been in the compact or the sub 4 metre space which includes the Ford Ecosport and Renault Duster – Mahindra TUV300, which is to be launched on Thursday will add urgency to the segment.
Most industry experts attribute the growth in the compact SUVs to growing aspirations of customers, convenient to drive in the urban market due to the smaller size, lower duty it attracts compared to full SUVs.
Check out launch story: Mahindra TUV300
The decline in the utility vehicle segment due to poor rural demand had major impact on Mahindra and Mahindra (M&M)– India’s largest utility vehicle manufacturer. The situation exacerbated when the company did not have any new product in the compact SUV segment which currently constitutes 40% of the total volumes in the utility vehicles segment.
The Mumbai-based company is now all set to launch its latest compact SUV named the TUV 300 in the domestic market on September 10. The design of the vehicle is being influenced from that of a battle tank and will be based on a new platform.
The vehicle will be manufactured in the manufacturing plant situated in Chakhan and is expected to be priced between Rs 6.5 lakh to Rs 9.5 lakh.
Being a late entrant M&M planned the launch of the vehicle at a time when the compact SUV segment is lacking new products and the festive period in western and eastern region of India will kick with Ganesh Chaturthi on September 17 followed by Dushera and Diwali. The sales during the festive period accounts for 30% of the total volumes in a year.
Volumes for Duster during the April to June period in FY16 declined by 50% y-o-y to 6,451 vehicles while the Ford Ecosport volumes during the same time decline by 18.02% y-o-y to 15,240 vehicles.
“The compact SUV segment will grow in the future. This new product will be critical in for M&M and given the track record of the company, if they can price and position the product right, this new vehicles will do great in the market,” said Abdul Majeed, Partner, Price Waterhouse Coopers.