Mahindra, India’s leading UV manufacturer is facing a tough time. While the company has a host of vehicles to cater to everyone’s needs, it is dropping market share. Even though the company has introduced 2 new products in 2016, that hasn’t helped much. Here are 5 big reasons why Mahindea needs a super hit SUV, now!
Top-selling Bolero under big pressure
For over a decade, the Bolero has been the highest selling utility vehicle in the country, till the Brezza came along. The Bolero is mainly popular due to it being a value for money proposition. For this price, there is no vehicle that provides similar levels of ruggedness and practicality, which is why the Bolero is much loved in the rural market.
Till 2014, the company was selling close to 10,000 units a month, however that has drastically reduced since then. Over the past two years, the Bolero is managing roughly 5000-6000 units. The company has even introduced a new sub 4-meter Bolero with a cheaper price tag to help sales, however that hasn’t done much either.
Why the drop?
The main region where the Bolero sold was the rural areas. The past two years have been bad for the rural market. There have been severe droughts which has resulted in the drop of the rural economy. With the Bolero now struggling to do the numbers it used to, Mahindra now needs a new/completely revamped vehicle to take its place.
The Nuvosport is basically a brand new Quanto, the company’s first sub 4-meter SUV based on the Xylo. The Nuvosport was introduced just a year back to give the company a better chance to take on the Brezza and the Ecosport. While the Nuvosport sold more than 500 units in April 2016, since then it has barely sold more than 300 units. What’s worse is that over the last 6 months, the company hasn’t even managed to reach triple digit figures for the Nuvosport, which is worrying.
The TUV was launched with a lot of hope. The product, inspired by a tank was designed by Pininfarina and was brought to give the Ecosport a run for its money. The company even introduced an AMT version of the TUV, to make the vehicle have a wider appeal. At its launch, the company hoped to sell 3500 units of the TUV every month.
However they have only been managing to sell close to 2000 units every month, which the company is also disappointed about. The compact SUV segment, in which both the Nuvosport and TUV fall in is the largest growing market in India. The Ecosport sells close to 4000 units every month where as the Brezza, which is the segment leader sells 10,000 units every month.
The company is looking to update the TUV and is expecting volumes to double, according to a report.
The KUV is an all-new product which was introduced by the company. It is a micro SUV, as the company would like to call it. The KUV doesn’t have any real competition in the market. The company was looking to sell 5000 units of the KUV every month, but has only managed below 3000 units every month. Mahindra is planning to launch a new model of the KUV in a bid to improve sales of the product.
Now to the XUV, which is the company’s flagship product. The XUV has been a high selling product since its launch. When launched, the company had to come up with a lottery system to provide allocations to customers, since the demand was so much. While the vehicle was selling more than 2000 units, the craze is now reducing.
Even the Toyota Fortuner outsold the XUV last month. The Innova Crysta, which has become more premium now is also posing a threat to the XUV. The Crysta is selling over 5000 units a month and while it isn’t a SUV, it is still managing to impress customers. Tata’s latest offering, the Hexa too has been giving the XUV a tough run, selling above a 1000 units monthly.
In 2011-12, Mahindra had a market share of 55.09% in the utility vehicle segment. That has been steadily reducing over the past 4 years. In 2012-13, the share went under 50%, to 47.66 %, to 41.71% in 13-14, to a constant 37% in 14-16 period. It was in the 2016-17 period where Mahindra saw their biggest drop, going to as low as 29.2%.
The competition is heating up in the UV segment. Maruti, Hyundai, Honda and Toyota have upped their ante and now are providing stiff competition to Mahindra. Tata is all set to join the party too with the launch of the Nexon later in the year.
Mahindra really needs a strong volumes product in the compact segment, to regain the volumes being lost.