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| M&M explores passenger variant for Gio |
| Sohini Das / Ahmedabad Nov 03, 2009, 00:43 IST |
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Mahindra & Mahindra (M&M) is all set to expand its newly-launched Gio platform, a 0.5 tonne truck. The company plans to come up with passenger carrier versions and a CNG variant, and is eyeing export markets in the long run.
It has first-mover advantage in the segment that has been created with the launch of the Gio, which falls between the Tata Ace and the three-wheeler space.
“We have been able to offer the product at a very competitive price of Rs 1.65 lakh, merely Rs 25,000-30,000 more than a three-wheeler," said Vivek Nayer, senior vice president, marketing, automotive sector, adding that the net cost of developing the product was only Rs 25 crore.
M&M has used in-house tooling technology and the engine has been developed by US-based Kohler.
It is now looking at leveraging this cost advantage to address the export market, as well as come up with newer variants on the same platform.
Nayer told Business Standard, "We will, however, focus on addressing the domestic demand first". M&M will now produce 2,000 units per month at its Haridwar plant and the capacity can be easily scaled up to 3,000 units per month without additional investments.
While the Gio has been developed keeping in mind intra-city transportation requirements, the passenger variant could be positioned for inter-city travel as well, on the lines of the Tata Magic. As of now, M&M hopes to garner market share from both the three-wheeler as well as the light commercial vehicle (LCV) space. "A mini-truck is typically priced at Rs 2.78 lakh, while a three-wheeler costs around Rs 1.38 lakh. According to market surveys, in intra-city travel, the cargo capacity of a one-tonne truck is not always fully utilised and it offers 16-18 kilometres per litre (kmpl),” Nayer claimed.
M&M is claiming to offer 32 per cent savings in operating costs compared to a mini-truck, as it says Gio will give 27 kmpl, with an optimum-size cargo box of 500 kg. Together, the mini-truck and the three-wheeler market in India is estimated at 180,000 units per annum or 15,000 units per month. Of this the mini-truck sells around 110,000 units and the three-wheeler around 68,000 units. "We are expecting the market to grow by around 10-12 per cent per annum, as well as the Gio giving rise to a new segment altogether," Nayer said.
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