Mahindra & Mahindra (M&M) on Monday launched its new mini passenger vehicle (MPV) Marazzo to catch the attention of consumers ahead of the festive season and drive its automobile sales. Marazzo was launched at a starting price of Rs 9.99 lakh and will compete with Maruti Suzuki’s Ertiga, Hyundai’s Creta, and Toyota’s Innova. The utility vehicles (UVs) falling in the price range of Rs 10-15 lakh constitute around 93% of the total UVs sold in the country. The dominant players in this price bandwidth include Maruti Suzuki’s Vitara Brezza, Ertiga and S-cross with a 30% market share.
M&M occupies the second position with Bolero, Scorpio and XUV-500 with a 24% market share, followed by Hyundai’s Creta and Toyota’s Innova with 14% and 8%, respectively. However, in Q1FY19, while Toyota’s Innova witnessed a growth of 47% year-on-year at 19,552 units, M&M posted a growth of 10% y-o-y at 24,722 units. Moreover, while the sales of XUV500 increased by 47% sequentially , Scorpio and Bolero’s sales fell by 28% and 10%, respectively, quarter-on-quarter.
Commenting on M&M losing market share in the UV segment, executive chairman Anand Mahindra said: “The idea of looking at everything in terms of the market share is wrong. We want to offer a good product to our customers and improve our returns.”
The firm reported Ebitda of 15.7% in Q1FY19, up 250 bps y-o-y, driven by improvement in profitability in the truck business and farm equipment sector. While the analysts expect recovery in the company’s SUV segment due to new launches, Jefferies said expenses on new launches can put pressure on the margins.