M&M fuels SUV drive with SsangYong potion

Indian auto major Mahindra & Mahindra (M&M) is betting big on ‘sports utility vehicles’ (SUVs), a segment it has largely dominated for the last many years in the country.

Ramping up the SsangYong business will be key ingredient in M&M’s recipe for the growing SUV market in India, which still begs to be spoilt for choice.

The company had completed acquisition of a majority 70 per cent stake in South Korean SUV major SsangYong Motor Company (SMC) last year, towards which it invested $463 million (around Rs 2,105 crore).

“The SsangYong acquisition allows our company to benefit from bringing its vehicles with class-leading technology to India,” M&M Chief Sales and Customer Care Officer (Automotive Division) Arun Malhotra told Deccan Herald on Tuesday.

“The SUV segment is very important to us, and we are one of the largest players in the field,” Malhotra said, citing the company’s extensive portfolio of six utility vehicles, including SUVs -- one of the largest in the Indian market. 

For the month of October 2012, M&M announced monthly auto sales of 53,438 units, representing 29 per cent growth over the same period last year, when sales stood at 41,506 units.

Passenger vehicles, including utility vehicles, also registered high sales at 26,932 units in October 2012, logging growth of 44 per cent over the corresponding period last year.

Mentioning that SUVs have become immensely popular in the country, Malhotra said, “Last year, cars amounted for 85 per cent of the passenger 4-wheeler market, while UVs (including SUVs) were at only around 15 per cent.”

This fiscal, in the last seven months, UV market share has increased to 22 per cent, while the share of cars has come down to 78 per cent.

Definitely, there is a shift being seen in the buying behaviour of Indians, with many of them prefering UVs, he added.

Plant expansion

As part of its expansion plans for the SUV segment, Mahindra has invested around Rs 3,000 crore at its facility at Chakan near Pune, from where it started rolling out the XUV 500 last year. The vehicle became an instant hit among SUV buyers.

With the aim of bringing in a portion of the SsangYong portfolio to India, the company has invested an additional Rs 68 crore in Chakan, in recent months, to set up a press shop, dye shop and toolings among others, to assemble the latest SUV offerings from SsangYong - RX5 and RX7. “The target is to ramp up capacity at our Chakan plant. We plan to have an annual installed capacity of 5,000 units for SsangYong’s two vehicles, which we will achieve by the end of this year,” he said.

Accordingly, M&M on Tuesday launched the Rexton RX5 and RX7 in Bangalore. The new vehicles, which are priced between Rs 18.06-20.10 lakh (ex-showroom Bangalore), are additions to the company’s burgeoning SUV business.