Mahindra & Mahindra (M&M) has announced that it is postponing plans to ramp up the capacity for KUV100 due to moderate monthly sales for the compact SUV.

In April, the company had said that it would increase the capacity for KUV100, which came with a petrol option, from 4,500-5,000 units a month to over 7,000 units on strong demand particularly for the petrol version. However, increased challenges by way of price corrections by competition impacted the sales of the vehicle.

“As the initial momentum for KUV1OO has not been sustained and sales are moderating, the company has deferred its plan to increase the capacity to 7,000 units,” the company management told the investor conference call.

However, it has chalked out plans to maintain monthly sales of about 5,000 units for KUV100, going forward.

Mahindra said its SUV TUV300 was also facing challenges due to increasing shift towards to petrol models among the buyers. TUV300 doesn’t have a petrol option.

The company plans to focus on consolidating its existing offerings in the immediate term. It has devised plans to roll out at least one all-new model every year from FY18 to FY20.

While lifting of ban on diesel vehicles in NCR comes as a big relief, the company is also preparing to strengthen its presence in the petrol segment in the next couple of years. While a petrol variant of XUV500 is slated for launch during the last quarter of this fiscal, Scorpio will also have petrol variant during first quarter of next fiscal. Also, the company is planning to roll out its own 1.5 L petrol engine in the next two years.

During April-July 2016 period, M & M’s market share in the UV space stood at 30 per cent, down from 36 per cent in a year ago-period. Maruti has emerged as a strong Number Two with a market share of about 24 per cent, up from 13 per cent in a year-ago period.

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