Mahindra bets on XUV 7XO to reset premium SUV play, lure luxury buyers

More than half of M&M's premium SUV, EV customers are first-time Mahindra buyers

Mahindra & Mahindra (M&M) is stepping up its push in India’s premium SUV space with the XUV 7XO, a heavily-updated version of the XUV700. This move, the auto giant believes, can increasingly draw customers away from entry-level luxury brands. 

Since its launch in 2020, the XUV has been the fastest SUV brand to cross ₹50,000 crore in revenues in the premium segment.

While the XUV700 is exported to markets such as South Africa and Australia, Mahindra will prioritise the domestic market for the 7XO. The company has an installed capacity of around 10,000 units a month for the XUV at its Chakan plant, against current sales of 6,500–7,000 units, providing comfortable headroom. The launch also coincides with M&M’s rise to the No.2 position in India’s passenger vehicle market, overtaking Hyundai Motor India and Tata Motors. This is largely driven by strong SUV demand. M&M has sold 600,000 vehicles (retail) in 2025, growing by around 20 per cent year-on-year (Y-o-Y). The mid-size UV2 segment — comprising SUVs and multi-utility vehicles (MUVs) typically between 4,400 mm and 4,700 mm — has emerged as a key growth driver. 

 

After growing at just 1.1 per cent between FY15 and FY19, the category has since clocked a 29 per cent compound annual growth rate (CAGR), outpacing the mainstream SUV segment 23 per cent growth. 

“This is the fastest SUV to reach ₹50,000 crore in revenues —admired, loved and celebrated,” said R Velusamy, president of automotive business, M&M. Mahindra is keen to capitalise on this momentum by using software-led upgrades, ride and handling improvements, and a strong feature and safety package to attract buyers moving up the value curve. Many car buffs are also evaluating entry-level luxury SUVs that have become more affordable post-GST. Mercedes-Benz’s GLA, for instance, is now priced below ₹50 lakh. Executives say the strategy is already delivering results. More than half of Mahindra’s premium SUV and EV buyers are first-time Mahindra customers, many of whom have owned or considered luxury vehicles. “Customers are evaluating what they get for their budget, not just the badge,” Velusamy said, adding that some buyers are stepping down from ₹50 lakh budgets to ₹30 lakh. Nearly 80 per cent of XUV700 customers opt for AX7 or AX7L variants, typically upgrading to the ₹25–30 lakh bracket. 

Production of the refreshed model began in late November, with deliveries starting mid-January. Exports of the updated model will follow once domestic demand stabilises. The UK, however, is not a focus for this internal combustion engine (ICE) product due to emissions norms, with Mahindra prioritising EVs there. Overall, the company exports about 3,500–4,000 vehicles a month. 

Looking ahead, Mahindra’s growth plans hinge on its next-generation NU_IQ platform, with a greenfield capacity of 20,000 units a month at Chakan planned by FY27. This will support both domestic scale and selective exports.

 

XUV3XO gets an EV avatar

  M&M brought an electric version of its popular subcompact SUV—  the XUV 3XO EV, with prices starting at ₹13.89 lakh (ex-showroom).

  Positioned as an urban-focused electric SUV, the XUV 3XO EV is offered in two variants—AX5 and AX7L—with deliveries scheduled to begin from February 23, 2026. The 3XO is one of the best-selling SUVs of M&M. The 3XO is a facelift version of Mahindra’s first compact SUV XUV300. 

Launched in April 2024, the 3XO sold more than 100,000 units in one year. Since its launch, the 3XO has sold nearly 180,000 units. 

In its new EV avatar, the car would offer a 285 km range powered by a 39.4 kWh battery pack. 

Nalinikanth Gollagunta, CEO – Automotive Division, M&M  said, “The XUV 3XO rewrote the rules by bringing aspiration and accessibility together at scale. 

With the XUV 3XO EV, we are extending that winning proposition into electric mobility for customers who want an EV that simply fits their lives—day after day.” 

Variant-wise prices are ₹13.89 lakh for AX5 and ₹ 14.96 lakh for AX7L, with an optional 7.2 kW wall charger available at an additional ₹50,000.