SUV maker Mahindra & Mahindra rides into US market… on a scooter

By: |
September 3, 2015 12:50 AM

India's largest SUV maker Mahindra & Mahindra (M&M) is ready to make its debut on US roads. But it's starting with two wheels, not four.

India’s largest SUV maker Mahindra & Mahindra (M&M) is ready to make its debut on US roads. But it’s starting with two wheels, not four.

Mahindra hopes to win over city and campus dwellers with a USD 2,999, Vespa-like electric scooter called the GenZe, which goes on sale this fall in California, Oregon and Michigan.

Sales could soon expand to other states and Europe.

If buyers like it, Mahindra could use the GenZe as a springboard into the car market, just as Honda made the leap from motorcycles to cars here in the 1970s.

The strategy has some risks. Scooters have never been as popular in the US as elsewhere — people in China buy as many electric scooters in a day as Americans do in a full year, for example. And consumers might not trust Mumbai-based Mahindra, which scrapped an attempt to sell vehicles here five years ago because it couldn’t meet US safety standards.

“The pressure has really been on to make sure that we get this right,” says Terence Duncan, the head of customer engagement for the GenZe and one of its chief designers. “What we’re doing, really, is introducing the brand to American customers.”

To appeal to septics, Mahindra designed the GenZe in Silicon Valley with features favoured by tech-savvy Mille- nnials, like a secure laptop charging port under the seat.

It opened its four stores in San Francisco and Portland because buyers there are more accepting of two-wheeled transportation. In Michigan, buyers can get a GenZe at the Ann Arbor factory where it’s made.

The GenZe only goes up to 30 miles per hour, so riders won’t need a motorcycle license. Its most innovative feature is a 28-pound removable battery, which riders can unhook and carry inside to charge.

The battery takes 3.5 hours to fully charge, and the scooter goes for 30 miles on a charge. A 7-inch touchscreen display tells drivers their speed and range.

Only about 5,000 electric scooters will be sold in the US this year, according to Ryan Citron, who analyses the market for the consulting company Navigant Research. Among them: the ZEV 2700 and the Bravo EVT-168, which cost about the same as the GenZe.

By comparison, 30,000 will be sold in Europe and 3.9 million in China, where electric scooters cost less than half the price of a GenZe because they use a cheaper battery.

Citron says about 46,000 gas-powered scooters will be sold in the US this year. Any scooter has a tough time selling when gas prices are relatively low, he says.

This isn’t Mahindra’s first attempt to crack the US car market. The USD 16.9 billion conglomerate controls about 40 per cent of the SUV market in India.

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