Companies

Rural, semi-urban push helps M&M buck car sales slump

Roudra Bhattacharya Mumbai | Updated on August 16, 2011 Published on August 16, 2011

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Most large car makers in the country are watching the falling trend in sales with a worried look, but Mahindra & Mahindra (M&M) has come as a surprise package by actually maintaining steady growth for the first four months of the fiscal.

A combination of factors have aided the home-grown carmaker in countering the industry trend, including the increased push in rural and semi-urban markets and better product positioning. Another major factor is the rise in popularity of diesel vehicles – M&M's mainstay – as petrol prices are more expensive, by over Rs 20 a litre.

“Increase in diesel sales is one reason why we have done well. Rural sales are (also) gaining … there is a lot of focus on expanding network, manpower and the availability of financing.

“We have strengthened after sales network in all districts of the country now,” Mr Arun Malhotra, M&M's Senior Vice-President (Marketing), told Business Line.

Meanwhile, car sales for other large players – Maruti Suzuki, Hyundai and Tata Motors, had dipped due to a negative market sentiment on the back of rising interest rates, vehicle and fuel prices. As these three companies account for 75 per cent of overall car sales in the country, the overall industry performance is also dismal.

Utility Vehicles

In June-July 2011, M&M gained market share in utility vehicles (UVs) to 62 per cent, from 55 per cent last year. It has also increased production for the Scorpio SUV, its top-seller Bolero and the Xylo MUV, even as it is increasing the engine manufacturing capacity further.

“One thing that has gone right is that we haven't hit record sales in any one product, but all have done well. Though we've launched multiple models in the UV segment, such as the single and the double-cab Genio pick-up, they have just added to the volumes,” he said.

Verito revival

The revival in the sales of the Verito (formerly the Logan) after minor design changes and aggressive marketing push, have also worked favourably. Verito sales, of which 90 per cent are from the diesel model, have more than doubled in June and July to 1,510 units and 1,630 units, respectively.

“The marketing and communication strategy has worked. The new look has added value and there's more confidence in the Mahindra brand. Due to various reports, people thought earlier that Renault would move out, so the Logan was a risky car to buy,” Mr Malhotra said.

> roudra.b@thehindu.co.in

Published on August 16, 2011
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