Low-cost UV on Mahindra radar

5-seater to be priced below Rs 4 lakh.

As the world's attention is riveted on the ultra-low-cost car of Tata Motors, fellow home-grown passenger vehicles maker Mahindra & Mahindra is busy developing a platform for low-cost utility vehicles.

These vehicles, expected to roll out by the end of 2009, will change the market for utility vehicles by bringing the entry level down to Rs 4 lakh or less from the current level of about Rs 6 lakh.

"Our forte is utility vehicles... We have to look at the mass market," said Arun Jaura, senior vice-president (R&D and global product development), M&M, which has its headquarters in Mumbai, just like Tata Motors.

Asked if that meant the vehicles will be priced at Rs 4 lakh or less, which is the price level for the mass market in passenger vehicles, Jaura answered in the affirmative.

The cost of the vehicles will be brought down by reducing the size of the vehicles to five-seaters. At present, utility vehicles typically accommodate seven people, more in some cases.

The other method being adopted is to use engines of much smaller cubic capacity displacement "" 800cc to 1,200cc "" than those in use now. The utility vehicles now have engine sizes in the range of 2,000 cc to 3,000 cc.

"Indian families these days are typically two plus two, or two plus three. A five-seater makes sense," said Jaura.

M&M is now known for Scorpio, a utility vehicle that too is built on a platform developed in-house.

One appeal of utility vehicles is the higher power output of their engines.

M&M hopes to retain this appeal despite using smaller engines as the new engines enable higher power output for the same engine displacement.

The low-cost utility vehicles may also do away with the overdrive option in their gears to reduce expenses. The company is also looking at new types of materials, especially plastics.