M&M Lines Up Compact SUVs To Take On Ford EcoSport And Renault Duster

MUMBAI: Mahindra & Mahindra is lining up three major offerings in the compact sport-utility-vehicle segment for launch over the next 18-24 months, as it aims to reclaim space lost to the Ford EcoSport and Renault Duster over the past couple of years.

All the three vehicles will be less than four metres long, a segment that industry experts say is going to be a key driver of passenger vehicle sales and where M&M has only a limited presence. Mahindra is still the local leader in utility vehicle sales, but its market share has fallen to 42% at the end of the fiscal year through March 2014 from more than 55% two years earlier.

Renault meanwhile has grabbed about 9% of the market with the Duster, and Ford captured 8.68% with its sub-4-metre EcoSport. M&M’s first compact SUV, the Quanto that failed to sustain the initial excitement, is getting ready for a major midlife facelift, said people with knowledge of the matter.

The project, codenamed U215, includes major design changes which are currently being worked on at M&M’s design centre in Italy. The U215 will be positioned between the other two vehicles in the pipeline — M&M's first micro-SUV, dubbed S101, which will create a new entry point for the company and be pitted as an alternative to premium hatchbacks, and the probable Bolero replacement, codenamed U301.

The U301 may co-exist with the Bolero, a vehicle that still has acceptance in the hinterlands. M&M intends to do a Maruti in the compact SUV space, offering an alternative at every Rs 50,000-75,000 price points over the entry-level vehicle, a person close to the company told ETon condition of anonymity.

"All three sub-4 metre SUVs will have different characteristics catering to different segment of buyers. Design will be the key differentiator. The S101 compact SUV has a car-like appearance whereas the U215, the new Quanto, will assume a more rugged appearance than the boxy stance it had when launched," this person said.

According to him, the U301 will have the boldest features with a “Jeep Wrangler-like appearance”. An M&M spokesman said the company cannot comment on specific product plans.

"As a general rule, we constantly work on refreshing all our products," he said. The MPV/SUV segment, which makes up for 22%-23% of the overall Indian passenger vehicle sales, is expected to grow in coming years. Industry experts say, the compact SUV market is expected to grow five times to make up almost half a million vehicle at the end of the decade and that the sub-4-meter space is expected to make up for a sizeable share of that. M&M has a strong band of loyal buyers and larger penetration in rural areas, but developing a sub-4-meter vehicle is extremely critical for it to regain its lost market share, said Gaurav Vangaal, senior analyst, forecasting, at consultancy firm IHS Automotive.

The urban sub-compact SUV segment, which did not exist a few years back, is expected to make up for a sizable 20-25% of compact UV space going ahead, he said. "M&M is there with its Quanto, but not with a proper sub-4-metre SUV, so it needs to prepare itself aggressively with more UVs in that space to protect its turf."

Pawan Goenka, president and executive director at Mahindra, has admitted in the past that the company wasn't quick enough to react to the compact SUV wave and that its answer to compact utility-vehicle space has been a year or two late. It seems the lineup of compact SUVs planned by the company is to not just take on existing rivals, but also react proactively to ensuing competition from the likes of Maruti Suzuki and the local units of Hyundai Motor and Honda Motor, who too have lined up sub-4-meter SUVs for launch in the coming two-three years.

  The person close to the company said the face-lifted Quanto will in fact be an interim model for M&M and has a potential of 24,000 units a year, before an all-new Quanto, now dubbed U321, hits the market in 2017.

The U321 is currently getting developed in the US and it will be a versatile platform that can deliver multiple products, from sub-4-metre to bigger 7-seat utility vehicles.

While M&M has seen its bread-andbutter utility vehicles Scorpio and Bolero as well as the XUV 500 selling in healthy numbers, its 'U platform' vehicles – the Quanto, Xylo and Genio – have been a major drag for it. It does not quite end there for M&M. Its R&D centres in India, the US and Italy are buzzing with projects. A face-lifted Scorpio and XUV should hit the market shortly.

It plans to revamp lifestyle offroader Thar, which now gets an underpinning of the U platform, a departure from the legendary MM540 base due to upcoming safety regulations. And, pickup truck Genio will be significantly enhanced in its upcoming facelift to take more abuses, which is very common in the Indian market.