As competition heats up in the multi-utility vehicle (MUV) segment, the country's leading utility vehicles player Mahindra and Mahindra (M&M) plans a flexible manufacturing line for its latest launch the compact SUV Quanto to capture market share. Also, the company expects to have more success with the Quanto on the exports front compared to its predecessor the Xylo.
"We have invested around Rs 100 crore on product development of the Quanto, and the vehicle will be manufactured at our Nashik plant. We have kept an initial arrangement of 7,000 units per month for the Xylo and the Quanto combined. However, around 70% components of the Quanto are common with the Xylo, and the capacity is felxible", said Pravin Shah, chief executive (automotive), M&M. He added that the company has an option to expand the production of the Quanto depending on market demand.
For starters, M&M will make 2500 units of the Quanto next month.
It now sells 2500 units of the Xylo per month. "The Quanto, however, is meant for an entirely different segment of customers, those who are buyers of entry level sedans and premium hatchbacks", Shah said adding that M&M did not expect Quanto volumes to cross that of XUV 500. The Quanto priced between Rs 5.82 lakh and Rs 7.36 lakh has competition in the market from Maruti Suzuki Ertiga and the Renault Duster. Both Maruti and Renault are now working on expanding capacities of these popular vehicles which currently have wait periods ranging between three to seven months. Keeping a flexible line would help the company to meet demand in the market more efficiently and reduce wait period. Mahindra itself is also working on reducing the waiting on its popular model the XUV 500, by ramping up production. The company has so far supplied 35,000 units of the XUV 500 since its launch around September 2011, and has an order book of 17,000 with an average wait period of two to four months. As for exports, M&M plans to export the Quanto to countries like Bangladesh, Sri Lanka, Nepal, South Africa in the coming three to four months. This will be followed by exports to Europe and Latin American countries. "We also export the Xylo, but the numbers are not significant. With the Qaunto, we expect to export a significant size of our production", Shah said. In the April to August period this year, the overall UV segment in the automobile industry has seen 57% growth, at 207,651 units, in comparison to hatchbacks which have degrown by 3.36% at 555,743 units, and sedans which have grown by 15% to 196,733 units.