Mahindra & Mahindra is betting big on its Innova challenger, the under-development MPV codenamed U321.
19 Jun 2017 | 5998 Views | By Sumantra B Barooah & Mayank Dhingra
Home-grown utility vehicle (UV) specialist, Mahindra & Mahindra has been diligently working on an all-new people-mover, aimed at becoming a direct competitor to the segment best-seller, the Toyota Innova Crysta.
M&M has seen a pronounced hit in its share of the UV pie in the country in recent times, ...
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Home-grown utility vehicle (UV) specialist, Mahindra & Mahindra has been diligently working on an all-new people-mover, aimed at becoming a direct competitor to the segment best-seller, the Toyota Innova Crysta.
M&M has seen a pronounced hit in its share of the UV pie in the country in recent times, which once stood at 55.10 percent in 2011-12, declining to 29.20 percent in FY2017, a year-on-year de-growth of 8.7 percent. While a lot of it is attributed to non-optimal performance from some of its models, the rising competition has also had its role to play.
The company's upcoming MPV (codename U321), then, is pegged at being one of its most significant launches for the year 2017, carrying a lot of high stakes for the Indian company.
Now, with its energies channelised fully towards bringing out the all-round contemporary product, the U321 could be the vehicle that takes M&M back into growth lane.
Earlier this year, the company had announced plans to invest Rs 1,500 crore at its Nashik and Igatpuri plants in Maharashtra in the development and manufacture of the U321.
In an exclusive interview with Autocar Professional, Dr Pawan Goenka, managing director, Mahindra & Mahindra, spoke about the company’s confidence in the U321 and shared the strategy going forward for this year.
Two-pronged strategy
“We have a two-point strategy. One is to focus on how to improve the product that we have on ground today, bring attractiveness to the consumer and get some additional volumes. The second focus is on the upcoming products that would be launched during the year," said Dr Goenka.
“We have one major product launch in 2017 and that is the U321. We expect it to become a high-volume driver and add to our numbers that we are doing today. Success finally comes down to the right product, brought at the right price and its positioning, and that’s what we will work on. We are pretty confident we should see a turnaround in our market share this year.
“Any product that we launch, when successful, has a very positive impact on the company. If one has had a very good, successful launch, clearly it makes a difference, and not only on that product but it rubs up on many other products and nobody can ever wish or hope that every product will be a blockbuster. It cannot be like that. It cannot happen even to the best in the world. But, Mahindra has gone beyond the point where success or failure of one product can make or break the company,” said Dr Goenka.
Strengthening its stranglehold on small CVs
While the numbers in the passenger space could not seem to be doing well, its core area of operation, the bread-and-butter Small Commercial Vehicles (SCVs) has still kept M&M in good position, contributing 50 percent to its overall business and holding a good 51 percent share of the SCV (goods carrier) market in the country.
“Even in the month of May, we registered 22% growth in that segment and that is a major part of our portfolio. So, while we are working on the UV market share growth and I am pretty confident this year we will see a turnaround, whether it is 2%, 5%, or 7%, but we will see a turnaround for sure.
“But, at the same time, one should not forget that we are not only dependent on UVs. I am not saying it to take eye off from our performance in that space, rather, it is very important because that is what builds the image, and in the end, that’s what builds a brand,” said Dr Goenka.
The U321 could be expected to be a highly competent offering from the company, helping it to click in just the right way. But, taking up the fight against a strong market competition, which has also strengthened in the last five years, would make it critically challenging for the company to get back to the same levels and regain the chunk of the market, which it used to hold in the past.
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