With inventory build-up and the Uttar Pradesh government waiving registration fees for hybrid vehicles, major Indian automakers such as Mahindra & Mahindra and Tata Motors announced hefty price cuts on some of their best-selling SUVs in the segment, leading to some kind of a price war.

Mahindra & Mahindra (M&M) revised its XUV700 fully loaded AX7 range to ₹19.49 lakh while Tata Motors revised the price of Harrier to ₹14.99 lakh and Safari to ₹15.49 lakh with extended benefits of up to ₹1.4 lakh on their other SUVs while Punch electric vehicle is also offered with a benefit of upto ₹30,000.

"With regards to electric vehicles, never before seen benefits on the Nexon.ev (up to ₹1.3 lakh), have made it the most accessible it has ever been," Tata Passenger Electric Mobility Chief Commercial Officer Vivek Srivatsa said in a statement.

Inventory pile-up

More than 6,00,000 vehicle units are held with automobile dealers across the country. The Federation of Automobile Dealers Association (FADA) has stated that it will write to SIAM (Society of Indian Automobile Manufacturers) on the inventory pile-up ranging between 62 and 65 days.

“The inventory pile-up in June was enormous and touched up to 65 days. We will be approaching SIAM next week and are hoping for a solution to the inventory build-up,” said Manish Raj Singhania, President of the Federation Of Automobile Dealers Association (FADA) to businessline.

However, M&M clarified that the price revisions were a part of their strategy, “We wish to inform the stock exchanges that there is no linkage between the price cut on certain XUV700 variants and Uttar Pradesh EV/hybrid policy as reported by some media. The announced price cut of XUV700 is a continuation of our business strategy execution that was articulated in our 14th February 2024 analysts meeting where we outlined that we have to bring the average price point down to drive growth.” We kickstarted this effort with the launch of the AX5 select variant in May 2024 and have also brought in a 3rd-anniversary celebration variant for the higher-end XUV700 for a limited period of 4 months,” the company informed the stock exchanges.

The Uttar Pradesh government to promote environment-friendly vehicles, has announced a complete waiver of registration tax on strong hybrid cars.

“These well-deliberated actions were incorporated in our annual business plan basis the material cost savings realised earlier and hence we do not expect any material impact on our financials. The demand for the XUV700 continues to be robust and we have increased our manufacturing capacity in line with demand. Our new XUV700 bookings in June were 23 per cent higher than in May and there is no concern about unsold inventory as reported by certain news channels/newspapers. We firmly believe that hybrid is an interim and costly solution. And, we have the readiness to offer high-quality products for all solutions that our consumers desire,” mentions a statement from Mahindra.