The next couple of days will see two vehicle launches. No big deal considering the spate of new models hitting the market. However, what makes the Brio and the XUV 500 special is the contrasting position of their individual manufacturers.

While a confident Mahindra & Mahindra wants to go a notch higher in the SUV space, Honda needs to price its car aggressively and get the momentum back in place.

For a little over a year, it looked as if it had lost its way but recent price cuts with the City and the Jazz have put things back in order. “The timing could not have been better with the Brio due to be launched on Tuesday,” sources said.

M&M's new flagship

M&M's XUV 500, which will debut a day later, will take over from the Scorpio as the flagship vehicle and priced upwards of Rs 12 lakh. The company believes that its brand is now robust enough to attract buyers to a higher priced SUV.

Nearly a decade ago, when it launched the Scorpio, things were quite different. M&M had broken away from Ford to focus on this Rs 600-crore project, which was meant to take it to another league from offerings like the Armada and the Commander.

It was a big chance but the company was absolutely clear that it had to graduate to the next level. The Scorpio caught the fancy of the market and M&M has not looked back since.

The (ex-showroom) price positioning of its products has also been carefully done. The Scorpio (and its different versions) is right on top priced at Rs 7.3-12.24 lakh, followed by the Xylo (Rs 7.09-9.35 lakh) and finally the top-selling Bolero at Rs 5.19-6.80 lakh. The XUV 500 will end up being the most expensive option but M&M is quite upbeat about its prospects especially when the Rs 12-20 lakh SUV space is still vacant.

Honda's pricing

As for Honda, it was categorical from the beginning about sticking to the premium space in cars. This strategy worked effectively with the City and the spin-offs were evident with the Accord and Civic too. There were no hiccups for some years till the script turned awry with the Jazz pricing at over Rs 7 lakh.

Though the City continued its good run, a big shock was imminent on the fuel pricing front. Last year, the Centre decided to deregulate petrol prices but continued with the subsidy on diesel.

This was when Honda realised it was in all sorts of trouble thanks to the large price differential between the two fuels. As petrol began getting progressively dearer, the demand for diesel cars shot through the roof and the City found itself under serious pressure.

Clearly, there was little Honda could do to remedy the fuel pricing situation. Its diesel engine was still over two years away and Honda R&D decided to work overtime and prune the costing structure of the City and Jazz.

With their prices now slashed by Rs 66,000 and Rs 1.5 lakh apiece, the results have been ‘electrifying' with the crowds back in the showrooms.

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