Mahindra & Mahindra Ltd’s much talked about World SUV, the XUV500, will be launched in India and South Africa simultaneously by the end of 2011. Rajesh Jejurikar, chief executive, automotive division and member of the group executive board, tells Shubhashish about the project, the challenges it would face and the possible cannibalisation of M&M’s other products. Edited excerpts:
The car is termed as the World SUV. Where all do you intend to sell this car?
We are planning to launch the car in South Africa simultaneously with the India launch. It’s also being targeted for South America, Europe, Australia and South-East Asia. To begin with, the launch will be in India and South Africa and the rest will be in phases.
A global SUV, excluding North America?
A launch in North America is something that, if we do, will be at a later stage. North America has a completely different crash and emission requirements. It’s not that we will never do it, but we haven’t initiated that process. As of now, there are no concrete plans to launch this car in the US.
Is the company trying to gauge the success of the car before looking at the US market? If so, what is the benchmark for the success of the car?
Yes, that's the idea. We have plans to launch it across continents, barring the US. Europe and South America are the two critical indicator markets.
Who would form the dealership network to sell this car? Looking at leveraging the Ssangyong network?
Primarily, it will be Mahindra. Wherever required, we will leverage the synergies between Ssangyong and ourselves. This is part of the overall synergy exercise to see how we leverage our distribution network.
The car will be named XUV500 for all the markets?
In South Africa and India it will be XUV500. The branding for other markets will evolve as we go along; it could be the same. There are some thoughts but they haven't been frozen as yet.
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What are the challenges?
The challenge is that there isn't a large category now above the Scorpio going into premium SUVs. And the challenge is how do we make that into a large category and how do we create a market. Strategy is to make this into a large category and becoming a mainstream market rather than a niche market.
Do you fear the car might eat into the share of Scorpio?
If you look at our current portfolio, that is Bolero, Scorpio and Xylo, we have so far managed to do well in each one of them by uniquely positioning them and creating a different segment, either geographic or psycho-graphic which is brand personality led. That allows the products to do significant volumes. When we launched the Xylo we thought that it would cannibalise Scorpio or Bolero. But, both cars did very well and Xylo did well, too. The challenge is how do we uniquely position the car in a way that it minimises the cannibalisation. We can't say that there will be no cannibalisation and there will be some effect of it but we will try to keep the strategy as distinct as possible.
Which segment will this car compete in?
The idea is to get the D-segment car buyers to buy this SUV. It can't be for people who have already decided to buy a higher-end SUV. This is also a D-segment car. And typically, a D-segment car is priced from Rs 11 lakh to say Rs 18 lakh.