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Mahindra's new mini-SUV a litmus test for hatchback rivals

KUV100, the new mini sports utility vehicle (SUV) from Mahindra & Mahindra, is proving to be a challenge for carmakers whose hatchbacks are threatened by the new rollout. 
Companies such as market leaders Maruti Suzuki and Hyundai Motor India are watching demand pull for the KUV100 – which stands for Kool Utility Vehicle – closely. Bookings of the KUV100 started in December while deliveries began last month. 
“Immediately we do not have any plans to get into that (super compact SUV) space. We are watching the developments,” said C V Raman, head of vehicle development at Maruti Suzuki.
At Rs 4.5 lakh, the KUV100 is to M&M is what the Nano was to Tata Motors. Though its dimensions are small, M&M has added all the bells and whistles it can offer for that price. 
"The market will look at how consumers respond to that vehicle and only then take a decision. Today consumer aspirations are changing very fast and buyers are looking for more and more expensive vehicles", said a senior executive of Korean company Hyundai.
An example of consumer's growing appetite for premium cars is the demand pattern for two of Hyundai's cars. Its premium hatchback i20 sells nearly twice compared to its cheapest offering Eon despite being priced double the entry-level hatchback. 
Though it can seat six, the KUV100 is actually smaller than India's best-selling premium hatchback Swift made by Maruti Suzuki. Other hatchbacks in the same segment include Hyundai Grand i10, Ford Figo, Chevrolet Beat and Honda Brio.
Fearing erosion of market share, many manufacturers either announced plans or were secretly developing products to compete against the Tata Nano, whose base variant was set to be priced at Rs 100,000. However those plans were later dropped as the Nano failed to generate the expected numbers. 
In the absence of any real competition the KUV100 is targeting buyers of hatchbacks who did not have an SUV option earlier.
M&M's earlier product TUV300, which was launched a few months back, has been very well received in the market, forcing the company to raise production.

Further, M&M has plonked two new engines, in diesel and petrol, in the KUV100, which has never been used before by it in India. M&M has never used a petrol engine before in any of its SUVs sold in the Indian market. 
Both Hyundai and Maruti announced their entry into the compact SUV space recently with the Korean manufacturer already witnessing sustained demand for the Creta SUV.
Maruti Suzuki announced a major change in strategy last week with the debut in the SUV space. The company showcased the sub-4 meter Vitara Brezza compact SUV which will compete against the Ford EcoSport, Mahindra TUV300, Hyundai Creta and the Renault Duster.