Mahindra & Mahindra (M&M) plans to launch the 'Savari', a fresh utility vehicle (peoplesmover), and an upgraded version of its Marshal to meet Euro I emission norms. This was reported by a leading business daily.
M&M is the leader in the utility vehicle segment (61% market share in October 1999) and the tractor segment (29% market share). It is also engaged in the manufacture of light commercial vehicles (LCV). In addition to the automobile segment, the M&M group also has interests in information technology (IT) and realty.
The Savari will be billed to dealers in December. It will commence operations with a production capacity of 400 units a month. This will later be hiked to 800 units.
Meanwhile, M&M will launch the upgraded version of the Marshal with booster brakes, a new generation chassis and instrumental panel and ergonomically-designed seats.
M&M's latest bout of offerings is in response to increasing threat from Tata Engineering & Locomotive Co.'s (TELCO) stripped down version of the Sumo. The Sumo SE is priced at Rs 396,000 (ex-showroom Bombay), compared to Rs 385,000 for the Savari. In time, the Savari is expected to contribute close to 10% of M&M's UV sales.
Analysts are of the opinion that the Sumo has eaten into M&M's rural market share over the last two months. However, M&M claims otherwise, and has stated that its market share has actually increased.
The new launches will definitely spruce up M&M UV range, offering consumers a wider range of options. This will have a positive impact on its market share. This also seems to imply that M&M has been a lot more responsive to competitive threat from TELCO, than the other way round. If TELCO wants to sustain its UV market share, it will have to introduce some more models/variants, and can't rely on the success of the stripped-down Sumo for long.
M&M's 26% net profit growth in 2QFY2000 has enthused analysts who have flagged a 'BUY' on the company. Moreover, the company's IT venture (Mahindra-BT) has tremendous growth potential and will boost M&M's valuations when it finally goes public.
Mahindra & Mahindra has announced its financial results for the second quarter of the financial year 2016-17 (2QFY17). During the quarter, revenues grew by 15.6% YoY and adjusted net profits grew by 18.5%.
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