The Hindu Business Line : M&M focuses on multi-brand growth strategy

Mumbai, April 1 Mahindra & Mahindra, which launched the Xylo multipurpose vehicle and a new, macho version of the Scorpio recently, is now working on an aggressive strategy to expand the market along with its trusted Bolero sport utility vehicle.

In the process, the whole concept of a single flagship brand, which kicked off with the Scorpio, is virtually passé. “The Xylo could end up being something similar tomorrow like what the Scorpio has successfully achieved since its launch years ago. We are happy to be evolving into that image instead of saying that we have only one flagship brand,” Chief of Operations, Automotive Sector, Mr Rajesh Jejurikar, told Business Line.

The Bolero is at the lower end of the price pyramid with options ranging from Rs 4.75-6.97 lakh (ex-showroom Mumbai) but accounts for the maximum sales at 50,000 units a year. The Xylo is at the middle (Rs 6.53-8.06 lakh) while the Scorpio is at the top with a price range from Rs 7.33-10.19 lakh.

The Xylo was planned with an annual capacity of 25,000 units though it could be hard-pressed to meet delivery schedules given the heady market response. In the case of the Scorpio, the capacity at the Nashik plant is 30,000 units a year.

Mr Jejurikar said it was immaterial if the Bolero was ahead of the Scorpio in monthly sales numbers (which is the case) as each product “is positioned uniquely and it is possible that one will grow faster than the other”.

“From our perspective, we are quite open to swings between these brands (Bolero, Scorpio Refresh and Xylo) since they appeal to different segments. With these three together, we have a strategy to expand the market and so long as all the relevant niches to who we can appeal fall in place, it is just fine,” he said.

This strategy is quite different from the time when the Scorpio made its debut and was intended to position the new urban image of M&M. Mr Jejurikar said that those who live in semi-urban areas always had a strong perception of the company which “has got stronger now because the brand is clicking in metros” and has, therefore, become more aspirational.

“The successful positioning in metros has helped the M&M brand in semi-urban India,” he added. Interestingly, over the last year, non-metros have been contributing significantly to the growth of brands such as the Scorpio and account for a larger share of the sales pie.

Upscale brands

The Xylo has also done its bit in enhancing the metro image because of the customer profile. “These are people who own cars and seeking a replacement or a second vehicle for the family. Both the Xylo and Scorpio are upscale brands but distinctly positioned as the latter is more rugged and sporty with a sharper SUV positioning,” Mr Jejurikar said.