Mahindra to develop new vehicles

Utility and commercial vehicle maker Mahindra & Mahindra (M&M) will spend Rs 2,250 crore in the next two years to develop new vehicles to be rolled out by 2009 end.

The company has been developing four new platforms simultaneously in the utility and multi-purpose vehicle space aimed to further strengthen its presence in the non-car market.

The company has two highly successful offerings in this segment "� Scorpio and Bolero.

Of the Rs 4,500 crore investment planned for the company's Chakan project, which is a part of the company's planned capital expenditure of Rs 6,400 crore till 2010, about Rs 2,250 crore will be used to fund development of new vehicles including the Ingenio, a premium sports utility vehicle (SUV), a pick-up and a mass market platform.

Pawan Goenka, president (automotive sector), Mahindra & Mahindra, said, "Our new products due to debut in the next two years will be fully developed by us and sold in the Indian and overseas markets. The products will help us move up the value chain and boost our dominance in the utility vehicle space."

The Ingenio multi-purpose vehicle (MPV), which so far has seen an investment of Rs 550 crore, will be the company's most ambitious project after Scorpio, launched six years ago.

According to company officials, the vehicle was due for launch in the current financial year, but has been sent for further upgradation following increased competition.

The premium SUV project will be based on a completely new platform targetted at the Rs 14-18 lakh price bracket.

The aim is to have a presence in the premium SUV segment, which has so far seen a growth of more than 60 per cent this year. The segment has been dominated by players such as Ford (Endeavour), Honda (CR-V) and Toyota (Land Cruiser Prado).

Although the SUV segment is small in size, at 1,200 units a year in the domestic market, the demand for fuel-efficient SUV's globally in markets such as Europe and the US is very upbeat.

M&M will launch its SUVs in the US in 2009, while Scorpio, christened as Goa, is sold in the European market.

The mass market platform will address the demand for cargo movers designed to handle goods as well a passenger carrier too. The company is also looking at the pick-up market and planning to have a significant presence in the segment, according to sources.

An analyst said, "The overall market for pick-up vehicles in India is 1.5 lakh units which would maintain a steady growth of 21 per cent till FY10. So there is a huge potential to be tapped in this category. In the northern region, there is demand of 22,000-25,000 pick-up vehicles annually."