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M&M bets big on XUV300 to take growth story forward

Murali Gopalan | Updated on February 21, 2019 Published on February 21, 2019

Grand plans Pawan Goenka, Managing Director, Mahindra & Mahindra, poses with the new XUV300

Pawan Goenka, MD, details the journey of this SUV and the bonding with Korean acquisition SsangYong

Pawan Goenka lets you into a little secret about the recently launched XUV300. “This was the only product where we knew the name when we started work on it,” reveals the Managing Director of Mahindra & Mahindra.

This is quite unusual, given that in all products, the name generally gets decided only three to six months prior to launch. Not so in the case of the XUV300 where the team knew what it was going to be called even two-and-a-half years ago when work on this compact SUV kicked off.

What was also known was that it shared the platform of its successful predecessor, Tivoli, launched by M&M’s subsidiary, SsangYong Motor, in South Korea four years ago but this is where the similarity ended.

The product for India was going to be part of the XUV family and, hence, designed with the cheetah in mind as was the case of the XUV500. It was not as the team decided to call it XUV300 without bothering to figure out what it would look like.

Readymade name

“We knew from the very beginning that this is what we were going to call this SUV and, looking back now, I think it was a very good decision,” says Goenka. This is because XUV has become a fairly strong brand that epitomises the premium segment in SUVs. An association with that brand name would, therefore, help XUV 300 “in a big way” as also the XUV500 in return.

“So there is a freshness in the XUV family. People coming to see XUV300 will also look at XUV500. And some might decide that they have enough money to buy XUV500,” continues Goenka. In short, this strategy will hopefully be a win-win for both models.

The key here is that the two offerings have common traits, which justify their inclusion under the same XUV brand umbrella. As he explains, what set the XUV500 apart from the rest at the time of its launch in 2011 was its head-turning design apart from other USPs like its power, size and the slew of tech features within.

All these features are present in the XUV300 too. “So, it is clearly a continuation of the XUV philosophy,” says Goenka. To that extent, this clearly gives the brand a certain unique positioning within the M&M product portfolio. Sure, the Scorpio still has a certain pride of place but can never have a sibling like a Mini/Max Scorpio for instance. On the other hand, the XUV500 can spawn a son, daughter or even a father going forward. At one point in time, speculation was rife that the Rexton G4 would be christened XUV700 for India but then this would not have worked since there was really nothing in common in the brand DNA that defines XUV. Hence, Alturas was seen as the more appropriate name for this offering.

However, as Goenka says, XUV300 is clearly part of the same family. It is also very special since it was the first product that was initiated after M&M’s takeover of SsangYong seven years ago. “I had the pleasure of approving the investment at that time and be involved in a little bit of its development,” reminiscences the M&M chief, who is also Chairman of SsangYong.

Game-changer

The Tivoli, which debuted earlier from this platform, has been a huge game-changer for SsangYong since the time it was launched in 2014. In the process, it was a rebirth of sorts for the beleaguered Korean auto-maker as much as the Scorpio was for M&M many years earlier.

“When we launched Scorpio then, we had no clue how it would be accepted. This was the same for Tivoli,” says Goenka. After all, this was a brand new product for a segment that did not exist in the first place. This only meant a greater challenge from the viewpoint of market acceptance, especially from a company like SsangYong, which was just about coming out of the woods.

“So there was a lot of anxiety when we launched Tivoli, and of course it took SsangYong to a different level,” recalls Goenka of a script that was pretty similar to M&M’s with the Scorpio way back in 2002. However, he adds, there was no such anxiety with the XUV300 and, instead, the team is brimming with confidence.

This stems from the fact that this is a proven platform for four years running now. Tivoli has turned out to be a big success in Korea’s compact SUV segment and still going strong. “We were able to take that platform and do a lot more with it in order to make it right for India,” says Goenka. What was crystal clear during the development process was that if Tivoli had been replicated for India, it may not have succeeded since the design is not “SUV enough” for buyers here. “If we do not tailor the product according to the local customer’s tastes, it can never become a leading product,” he reiterates.

At best, a company can hope to sell a few hundred units but that is how much the product will go. “To make a leading product you have to, even if you bring the platform from outside, make it right for the end customer,” says Goenka .

The M&M team worked relentlessly to make the XUV300 a reality where a whole lot of Indian inputs were incorporated in the vehicle. “So having done all this, we went into the launch with a lot of confidence that this was a product that would at least turn the tide in terms of market share,” he adds.

And while the confidence levels are high, Goenka sounds a note of caution on the big unknown that is characteristic of any market, especially India. “Nobody knows how a consumer will behave. There could be something that we think we have done very well but the customer may not want it at all,” he says.

As he puts it, confidence should not be mixed with overconfidence where everyone is certain that the product will be a sure-shot success. “We know that we have a good product with good pricing but we still have to work as hard as we have done in the past to make it succeed. Confidence should never lead to overconfidence,” he says.

Crucial chapter

By the end of the day, the birth of XUV300 is an important chapter in the M&M-SsangYong journey where the partners have pulled out all the stops to ensure that the building blocks are in place. The M&M of today has different centres of excellence across the world ranging from MANA in Detroit, SsangYong in Korea and Pininfarina in Italy to Mahindra Research Valley in Chennai and the Design Studio in Kandivali, Mumbai.

All this translates into a big cerebral network within the Mahindra ecosystem, which needs to be leveraged optimally to meet future challenges. “If everything happens in one place by one set of people, you will not succeed,” says Goenka and this is where these five centres are more than doing their bit in keeping the momentum going.

It is this pooling of skills and competencies that has played a role in creating products like the XUV300, Marazzo, Alturas and even in the commercial vehicle space with the recently-launched Furio range.

“We are now able to leverage the complete network that we have created for engineering and product development,” he adds.

Yet, the overriding criterion is that sourcing will be done in India since this is the only way costs can be kept in check. “If sourcing went all over the place, we will not be able to meet price expectations of customers,” says Goenka.

This is what has helped keep prices of products like XUV300 and Marazzo at more realistic Indian levels. “And that is the beauty of being able to leverage all these networks for doing good engineering development, but still bring everything together in India so that we are able to manage price,” says Goenka.

SsangYong plans

As For SsangYong, the biggest priority right now is to launch the new Korando C300, which debuts in Korea soon. This is a brand new product that replaces Korando-C, which was launched during the time of the M&M acquisition in 2011.

The C300 is tipped to do good numbers and the target for SsangYong this calendar is to sell 1.6 lakh units, a 10 per cent jump from the preceding year. The other significant offering is the Tivoli refresh that will debut around the end of the third quarter.

After all, the compact SUV has been around for over four years now and the time has come for a new look. “Again, next year we have new products coming out, so it's a fairly busy schedule,” says an upbeat Goenka.

Published on February 21, 2019
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