M&M finds utility vehicles useful; invests more to sell more

By Venkatachari Jagannathan | 18 Nov 2002

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Chennai: The growing multi-utility vehicle (MUV) segment should see new launches at lower price points. The bugle was first sounded by Mahindra & Mahindra (M&M) with its Bolero Sportz.

“With this we have broken the Rs 5-lakh price barrier that has been dogging the MUV segment,” says M&M vice-president (marketing, automotive sector) Rajesh Jejurikar. “The model is cheaper than the Sumo Ezi (priced at around Rs 5.09 lakh) and the Qualis FS (Rs 6.56 lakh).”

Powered by the Euro I and II emission norms compliant 2,500cc Peguot diesel engine, the Bolero Sportz sports power steering, bucket seats, metallic paint, stylised decals and bumpers. The four-wheel drive version is costlier by Rs 80,000. The buyer has that option of a 7/8-seater model.

Launched in August 2000 at an outlay of Rs 20 crore, the Bolero doubled M&M’s market share. The vehicle was positioned as being trendy for the urban and semi-urban market. The company soon brought out the Bolero Camper, a variant positioned as “a stylish vehicle ideal for work and play.” And later the company phased out its Armada models.

“According to a study conducted by Indian Market Research Bureau (IMRB) the brand recall of the Bolero was as high as 10, higher than others in the category,” says Jejurikar. “The sales of the Bolero grew at a higher rate than the overall MUV segment. During this fiscal, M&M has sold 4,700 Boleros as against 4,100 units for the corresponding period the previous year.”

M&M’s Rs 550-crore MUV Scorpio has clocked sales of 5,000 units. Ask him about the huge investment made to roll out the Scorpio and the waiting time for deliveries, and he will reply: “We have ramped up the production now.”

Overall, the MUV segment is clocking a good growth rate, at the cost of mid-sized passenger car sales. During the first half of the current fiscal M&M sold 28,494 units of MUVs as against 25,282 units the previous year. Jejurikar says 75 per cent of the Scorpio buyers are car buyers and 53 per cent of them possess mid-sized car potentials.

Citing countries like America and Indonesia, where MUVs command a good market share in the personal transport segment, he says the Indian market too is moving in that direction.

The company is also witnessing brisk sales of its three-wheelers (less than .75 tonnes and more than .75 tonnes), its new light commercial vehicle LoadKing (goods carrier) and Tourister (passenger carrier).

The first half of the year saw an increase of 1,285 LCV sales, taking the total sales to 3,816 units. The quantum growth was in the three-wheeler segment where the volumes went up to 3,793 units from 662 units the previous year.

 

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