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Will take decision on Russian foray in 6 months: M&M

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Homegrown auto major Mahindra & Mahindra today said it will take a decision regarding its foray into the Russian market within the next six months but launch of Mahindra branded vehicle will happen after two years.

"In the the next six months we will take a decision but the launch of vehicle will happen after two years," Mahindra & Mahindra (M&M) President (Automotive and Farm Equipment Sectors) Pawan Goenka told PTI when asked about the company's Russian foray.

 

 

Speaking on the sidelines the annual convention of Society of Indian Automobile Manufacturers (SIAM), he said at present the company is under discussions to start Russian operations and has been talking to various distributors.

"We are studying the market as to whether we should to start with a manufacturing facility or by selling the vehicles as CBU (completely built unit) imports," Goenka added.

M&M's subsidiary SsangYong Motor has an assembly operation at present for completely knocked down (CKD) units in Russia for one model and the company plans to add more models to the line-up there by the end of next year.

When asked about possible price hikes of its products, Goenka said, "We are constantly evaluating it as margins are always under pressure. Prices will obviously go up, however the quantum of increase will be less this time as the commodity price hike has been modest."

Commenting on the XUV 500 model, he said the company has a pending order of 15,000 units, which would be cleared by November.

The company will also be launching its compact multi-purpose vehicle Quanto on September 20, he added.

On tractor sales, Goenka said August was disappointing but with monsoon deficiency down to just 12% now the company is hoping for sales to pick up during the festive season.

Commenting on the upcoming electric vehicle NXR from the stable of Mahindra Reva, Goenka said the product would be first launched in India.

"We will see how successful it is in India. We will probably then go to Europe before we launch it in the US market. The US product would be different from one which will be launched in India and Europe," he said without specifying timelines.

Goenka, however, hastened to add that Mahindra & Mahindra "has not made any plans for the US launch yet".

On the Quanto, he said the company is expecting volumes to be around 1,500 to 2,000 units per month to start with.

"Capacity won't be a constraint because it could come up on the same lines as Scorpio and Xylo. We will have flexibility on what we can produce. It is very unlikely that we will run out of capacity," he said.

When asked about the pricing of the Quanto, Goenka said, "I cannot say (now) but expectation should be realistic as it is not a small hatchback. It is after all a SUV."

He said after the Quanto, M&M will launch Rexton from the portfolio of SsangYong, with which the company would have a wide range of SUVs in India.

"We will have Quanto on the lower side and Rexton will be on the higher side and we are covering everything," he said, adding that the launch of Rexton would happen before Diwali.

Sounding bullish on the growth of the utility vehicle (UV) segment in India, Goenka said, "It is going berserk with a growth of 60% year-to-date. The UV segment is representing a shift from passenger cars, which is more in line with the developed markets."

Till about a year ago the UV segment had only few players like Mahindra and Tata and now everybody has announced plans to come up with these kind of vehicle, he said.

At the moment, the two segments are doing well in the India market - one is the UV and the other is 2.5 to 5 tonne pick up segment, he added.

On the sub-four metre Verito sedan, he said it would be launched before the end of this financial year.