Companies

M&M gears up for pan-India launch of Gio compact cab in 3 months

Amit Mitra Hyderabad | Updated on March 04, 2011

Mr Vivek Nayer, Senior Vice-President, Marketing (Automotive Division), Mahindra and Mahindra, at Gio's launch in Hyderabad in January (file photo).

Mahindra and Mahindra's Geo Compact cab.

Mahindra & Mahindra's latest offering, the four-wheeler Gio compact cab, hit the Indian roads in Patna last fortnight on a relatively quiet note. But that does not mean the automotive major is not betting big on this new category-creating product that will seek to make inroads into the growing three-wheeler market in India.

After Patna and subsequently in the eastern region of the country, M&M is now gearing up to drive the vehicle into the northern States this month and in the South by May to complete the pan-India roll out.

Based on the Gio pick-up platform, the new product is being rolled out from the company's Hardwar plant and is expected to reach its existing capacity level of 2,000 units a month in the next two years. “We have the required infrastructure to double the capacity, which we will do after the demand picks up,” Mr Vivek Nayer, M&M's Senior Vice-President - Marketing (Automotive Division), told Business Line.

M&M will drive the compact cab between the diesel three-wheeler segment, which is currently dominated by Piaggo, and the upper four-wheeler cab segment, ruled by Tata's Magic. It will mostly be marketed in the tier-2 and tier-3 cities as a stage carrier for urban-rural connect.

The diesel three-wheeler cab market is estimated to be 1.80 lakh units annually, with Piaggo having a nearly 60 per cent share. M&M also has its own product, Alpha, in this segment, with a market share of between 20 per cent and 25 per cent. Tata's Magic in the upper four-wheeler cab segment is estimated to be doing about 50,000 units annually.

Price & positioning

“While the three-wheeler products in this category cost about Rs 1.55 lakh and the four-wheeler cab about Rs 3.2 lakh, we are seeking to place the Gio cab as a new category product between these two at a price of about Rs 1.95 lakh. It will aim at giving an option to three-wheeler buyers to upgrade into a four-wheel drive at a minimal cost,” Mr Nayer said.

While the three-wheeler has a carrying capacity of three passengers, the Gio can carry six. The company believes that with the operating economics for the two categories being more or less the same, the Gio owner can earn an additional 27 per cent (or Rs 3,000 a month) with the extra seating capacity.

No cannibalisation

He did not think that the Gio will eat into Alpha market. “If you see the lower and upper end (four-wheeler cab) of the markets, there are significant opportunities. We are only providing a new opportunity in this segment,” Mr Nayer says.

The Gio's engine is being manufactured by US company Kohler at its Aurangabad facility — Kohler has 55 manufacturing facilities worldwide and produces more than a million engines annually.

Published on March 04, 2011

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