Mahindra and Mahindra Ltd, the country's largest utility vehicle maker, has launched a minivan, a derivative of its Maxximo minitruck, to compete with Tata Motors Ltd's Magic and Maruti Suzuki India Ltd's Omni.
With this, Mahindra hopes to capture a slice of the market for minivans in small towns and cities. Tata's Magic is the segment leader and sells 5,000-6,000 units a month. The market for mini- vans is about 140,000 units a year, Mahindra said.
Minivans are emerging as the top choice for both entry-level contract and stage carriages, said Rajesh Jejurikar, chief executive of Mahindra's automotive division.
Priced at `3.2 lakh (in Navi Mumbai, excluding taxes and insurance), Mahindra's minivan is `1,500 dearer than the Magic.
In the absence of a formidable competitor except the Magic, the new offering augurs well for Mahindra, said Surjit Arora, an analyst at Prabhudas Lilladher India Pvt. Ltd. But like Tata's Ace, a mini-truck with a payload capacity of less than 1 tonne, the Magic will continue to enjoy the first- mover advantage, he said.
Tata Motors created a new segment when it launched the Ace in 2005. Similar offerings from rivals such as Piaggio Vehicles India Pvt. Ltd, Force Mo- tors Ltd and Mahindra have entered the market but they have not been able to dent Tata Motors' share much. The Ace continues to sell 15,000-16,000 units a month. Mahindra spent `130 crore on its minivan project. The vans will roll out from its factory in Chakan near Pune. The line that makes the Maxximo truck has a capacity to manufacture 6,000 vehicles a month.
Mahindra has sold nearly 40,000 of its mini-truck since the launch in January 2010.
Mahindra's minivan will reach 230 dealer outlets nationwide by June, said Jejurikar. Subsequently, the company plans to offer a CNG (compressed natural gas, a less-polluting fuel) variant. It also plans to export the vehicle to neighbours Bangladesh and Sri Lanka, he said.
Sales of light commercial vehicles--such as Magic, Ace, Maxximo and Gio (another sub-1 tonne offering from Mahindra)--have been expanding at a healthy pace with auto makers tapping into the segment that addresses last-mile connectivity.
Sales of these light vehicles, which accounts for more than half of all commercial vehicle sales in the goods and passenger carrier segment, increased 22.88% to 353,000 units in the year that ended 31 March, ac- cording to the Society of Indian Automobile Manufacturers.
According to research by credit rating agency Icra Ltd, the light commercial vehicle segment in India is seeing a polarization towards the sub one tonne market; the demand is also shifting from the traditional three-wheeler segment to this segment. Icra estimates growth in the light commercial vehicle segment to be marginally higher than that of the medium and heavy duty segments, which are projected to expand at 9.5-11.5% over the next five years.
(Source-: livemint)