Home grown auto major Mahindra and Mahindra (M&M) today spurred off a price war in the utility vehicle market with the launch of compact-utility vehicle Quanto tagged between Rs 5.82 lakh and Rs 7.36 lakh.
The Quanto, the smallest UV in the M&M portfolio, will take on the likes of Maruti Suzuki Ertiga and Renault Duster which have taken the market by storm in recent months. While life-utility vehicle Ertiga is priced upwards of Rs 5.89 lakh, Renault Duster kicks off at Rs 7.19 lakh (ex-showroom, Delhi).
Pawan Goenka, president (automotive and farm equipment sectors), M&M had said earlier this month, “Mahindra is aiming to fill a need gap in the Indian automotive market for a versatile and compact SUV with the Quanto. We expect the Quanto to offer an exciting upgrade at a premium to customers who are otherwise looking for premium diesel hatchbacks or entry level diesel sedans.“ M&M is expecting to sell 1500-2000 units of the Quanto every month.
The Quanto is a sub-4 metre vehicle and offers M&M the benefits of lower taxation. At present, vehicles with length less than four metres are subject to excise duty of 12%, while duties on larger cars stand at 27%.
Taking the cue, US-based auto major Ford is also set to introduce sub-4m compact SUV EcoSport early next year. While the EcoSport will be powered by a one-litre ecoboost petrol engine, the Quanto has strapped on a 1.5 litre diesel engine. Ford has said a diesel version of the EcoSport will also be launched in India without specifying details.
Between April and August this financial year, sales of utility vehicles have grown by a whopping 57.03% to 207,651 units despite sluggish market sentiments. UVs now account nearly 20% of the passenger vehicle market in the country, up from 13.5% in the year-ago period. Sales have been driven by Maruti Suzuki Ertiga, Renault Duster, Toyota Innova and Renault Duster. While Maruti Suzuki has sold over 33,000 units of the Ertiga, Renault has over 15,000 bookings for the Duster.
For the first time in the Indian automobile industry, sales of utility vehicles in fact overtook that of sedans which grew by 15% to 196,733 units. In the period under review, sales of hatchbacks further declined by 3.36% to 555,743 units.
Industry experts hold the introduction of compact UVs at affordable price points has spurred growth in the segment. “There has been a shift in lifestyle of Indian consumers. People tend to drive out more often for weekend trips with families and friends. SUVs offer more seating capacity, are diesel driven and therefore more powerful and fuel-efficient. Therefore this segment has grown despite the sluggish market”, says an analyst at Mumbai-based advisory firm. The passenger vehicle industry grew by a modest 7.42% between April and August to 1,049,961 units this fiscal.
