Mahindra to have fewer brands, more extensions in its comeback trail

The XUV700, its latest SUV offering that broke cover on Saturday, is the first model that marks the shift in the strategy

Mahindra & Mahindra (M&M) is set to embark on a sharper brand architecture as it seeks to make a strong comeback in the competitive sport utility vehicle (SUV) market, said a senior company executive. It will have fewer 'top head' and brands and will instead rely on brand recall to launch new models (rather than new brands). It will create differentiation by way of brand extensions.

“Henceforth, we’ll have a lot more focused strategy on nameplates and a sharper brand architecture. It’s based on our research that the same brand can cater to different types of buyer profiles by way of differentiated features,” said Rajesh Jejurikar, executive director – automotive and farm sectors, M&M. 

M&M will follow a similar strategy for the Scorpio, the Bolero, and the Thar, he said.

The XUV700, its latest SUV offering that broke cover on Saturday, is the first model to mark the shift in strategy. Priced at Rs 11.99 lakh and going up to Rs 14.99 lakh, the model comes with variants under the MX and AX Series.

While the former is aimed at entry-level buyers, the latter offers trims loaded with advanced safety and high-end features targeted at more mature SUV buyers. The company has not revealed the prices of the top-end trim under the AX Series and the seven-seater.

M&M has not announced a date for bookings of the model just yet. It is expected to do so in the coming weeks.

M&M has learnt lessons on brand architecture the hard way. As the company's stronghold in the segment began to weaken in 2012-13 with the entry of 'car-like SUVs', it launched multiple SUVs — all under different brands. It included the Quanto, the NuvoSport, the KUV100, the Verito Vibe, and the TUV300. But none lived up to expectations. In trying to protect its turf and chasing volumes, M&M had to cede ground to rivals.

“The XUV700 will have to work hard for M&M,” said Ravi Bhatia, president and managing director at JATO Dynamics. The price gap between the entry-level and the top-end trim is slight. Typically it’s 82 per cent. In this case, it is 32 per cent, he said.

With this “price dispersion” strategy, M&M wants to create a perception of success. More than profitability, its priority right now is to re-establish itself as a strong contender in the market, said Bhatia.

With the latest offering that replaces the flagship XUV5OO, the SUV major is looking to straddle both ends of the market - the premium SUV segment, which has the Creta, the Seltos, the Tata Harrier, and the MG Hector, and the premium six-seater SUV segment, which has the Hector Plus, the Tata Safari, and the Hyundai Alcazar.  

“While the M-Series opens up the mass segment for us (those looking to upgrade from the sub-Rs 10-lakh SUVs), with the AX variant, we are looking to attract authentic, technology-savvy SUV buyers,” said Jejurikar.

Prima facie, it seems that the XUV7OO - with its pricing - undercuts prices of some rival models in both the segments. But a like-to-like comparison can be done only after M&M releases prices of all the variants in gasoline and diesel under MX and AX.

Earlier this week, the Mumbai-headquartered firm unveiled its new visual identity, including a brand-new logo that will differentiate its SUV portfolio. The all-new visual identity is in tune with the company’s focus to be makers of sophisticated and authentic SUVs. The XUV700 is the first vehicle to sport the 'Twin Peaks' logo.