The eve of India’s 75th Independence Day saw home-grown automotive heavyweight Mahindra & Mahindra (M&M) launch its second sports-utility vehicle (SUV) of the year, the XUV700.
Though accompanied by fanfare, glitz and glamour, this wasn’t a usual launch. It marked the beginning of the strategic shift in M&M’s ploy in the SUV segment, where it is launching a counter-offensive against the incessant slide in market share.
The Mumbai-based company is attempting to redefine its position in what it calls the ‘core SUV’ segment, aiming to become the ‘go-to’ brand for SUVs. M&M wants its customers to choose products for its authentic SUV feel, over much else. For this, the company is shedding its image of an ‘entry-level’ brand and is focusing on making it a premium offering.
Meet the real M&M
Speaking to Moneycontrol, Rajesh Jejurikar, Executive Director, Automotive and Farm Equipment Sectors, M&M, said: “We are trying to build a brand for authentic SUVs with an unmistakable presence, sophisticated experience, exhilaration, power and performance, because that’s what we are. We are not the entry-level brand. We are, of course, not super premium or luxury (but) we don't want to play in the entry-level or shared mobility space.”
Just about five years ago, M&M bet heavily on the shared mobility segment when it partnered with mobile app-based car aggregator Ola for supplying vehicles at special prices to Ola entrepreneurs (drivers).
M&M subsequently rolled out its own shared mobility platform called Alyte. But in the economic slowdown of FY20, followed by the pandemic-ruptured period of FY21, the shared mobility space took a significant knock.
‘We would look to become No.1 in core SUV segment’
Addressing shareholders for the final time as the company’s executive chairman, Anand Mahindra promised to get M&M to the top in the core SUV segment in four years.
“When a customer looks at our products, they should feel (that’s it’s a) authentic and not a ‘wannabe’ SUV. We would look to become No.1 in core SUVs with a very strong EV (electric vehicle) play by 2025,” Mahindra said at the annual general meeting.
With ‘core’ SUVs, M&M will emphasise on differentiated products in the utility vehicle (UV) segment, which houses SUVs and other body types. At present, SUVs do not have any standard definition, leading to products being defined subjectively. For instance, Maruti Suzuki defines the Ignis as an Urban Compact SUV.
The launches ahead
To spruce up its share in the SUV segment, M&M will launch the all-new Scorpio, later in FY22, followed by the electric variant of the XUV300 in FY23. A new XUV300, SUVs codenamed W620 and V201 and a five-door Thar, are in the pipeline.
M&M’s share in the UV segment, according to Society of Indian Automobile Manufacturers (SIAM) data, stood at 14.87 percent at the end of June 2021.
That is a significant erosion from the all-time peak levels of 55 percent in FY12, backed by strong brands like the Scorpio, Bolero and the XUV500. At that time, M&M’s only competition was Renault’s Duster and Skoda’s Yeti.
M&M’s dominance was challenged by Maruti Suzuki, Hyundai, Kia and Tata Motors. As of end-June, the four companies together control 66 percent of India’s UV market, led by Maruti Suzuki, with the Vitara Brezza, followed by Hyundai with the Creta and Venue. Tata Motors marked the biggest jump in market share with the Nexon, Harrier and Safari.
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