Mahindra & Mahindra's aggressive pricing of its first car, Logan, may trigger a price war in India's highly competitive passenger vehicle segment, analysts said today. |
This, however, brings some cheer for the customers, who are currently reeling under the impact of high interest rates that have pushed up equated monthly instalments and made car financing expensive. |
|
Mahindra Renault, a joint venture of Mahindra and Mahindra and Renault of France, which today launched the `Logan', has priced the petrol version between Rs 4,28,000 and Rs 5,69,000 in Mumbai. |
|
The diesel version will come with a price tag of Rs 547,000-644,000. |
|
While the petrol version will be available in 1400 and 1600cc, the diesel variant will have a 1500cc engine. |
|
The company, however, said these are 'introductory' prices, and would be revised if and when the input costs go up. |
|
Mahindra & Mahindra and Renault had in Feb 2005 decided to join forces to produce Logan in India. The joint venture is a 51:49 partnership between Mahindra & Mahindra and Renault. |
|
Analysts feel the 'Logan' would surely bring about a churn in the industry and make a dent in the market share of the more established players like Maruti Udyog and Hyundai. |
|
The car is pitted against rivals' offerings in the B and C segments, which have sales of about 900,000 cars a year, growing around 17 per cent a year, said Mahindra Renault Managing Diretor Rajesh Jejurikar. |
|
"At these price levels, the 'Logan' would be competing with a host of models including Maruti's Swift, Hyundai's Santro, Getz and Verna, and Ford's Ikon and Fiesta," said an analyst with a domestic brokerage. |
|
Hyundai Getz for example, which comes in two variants of 1100cc and 1300cc, starts at a price of Rs 389,000. Maruti's Swift, on the other hand, has a 1300 cc engine sporting a price tag of Rs 399,000. |
|
"For a little more money, customers are now getting a sedan in place of a hatchback," an industry expert said. |
|
Logan is also going to give competition to Hyundai Verna that comes in two variants of 1600 cc petrol engine and 1500 cc diesel engine. |
|
"The base model of Verna is priced at Rs 624,999 and it offers the same engine capacity as Logan," the analyst said. |
|
Maruti would probably feel the maximum heat, as 'Logan' would compete with the 'Swift', 'Zen Estilo' and 'Esteem'. |
|
"Maruti would now even have to rethink on the pricing of its (new sedan) SX4," an analyst with a large foreign brokerage said. |
|
India's largest carmaker plans to launch the new sedan in May and is likely to price it in the range of Rs 700,000-800,000. |
|
M&M is also claiming a fuel efficiency of 14-18 km/L in diesel engine and 10-13 km/L with petrol engine, which is normally a key concern for Indian car buyers. |
|
The Logan will roll out from M&M's plant at Nashik, which has been upgraded with an installed capacity to produce 50,000 units of the new car annually. |
|
Meanwhile, Renault is likely to buy automobile components worth a "few hundred" million euros from India by 2010, Patrick Pelata, executive vice-president, product planning, said today. |
|
Pelata also said that Renault has undertaken studies for launching European variants of its Logan car in India, like the 7-seater Logan. |
|
To a query about Mahindra & Mahindra Ltd., Renault, and Nissan Motors' joint venture manufacturing plant in Chennai, Pelata said they are looking at producing 400,000 cars per year by 2014. |
|
Today, Mahindra & Mahindra shares closed at Rs 726.10 on the National Stock Exchange, up 1.79 per cent from Monday. |
|
|
|