If you want to own a Mahindra SUV but don’t want to shell out large sums of money or get financing for it from a bank, you can still get one on lease through Mahindra’s new leasing offer.

M&M on Wednesday introduced leasing for retail buyers to expand their purchase options and make the ownership of these vehicles more affordable. The offering has been designed at a monthly lease rental starting at ₹13,499 for KUV100NXT and ₹32,999 per month for XUV500 for a five-year lease. There are other plans too with a minimum lease period of three years.

“The car leasing market is as high as 45 per cent of overall car sales in mature markets in the West. However, due to complex tax structures, it has been unviable in India so far. With GST coming in, we feel there’s an immense opportunity here among not just corporate buyers but even individuals,” VS Parthasarathy, Group CFO & Group CIO, Mahindra & Mahindra, told BusinessLine on the sidelines of the launch.

Currently less than 1 per cent of cars in India are leased and that too mainly by the corporate sector. Zoomcar recently started a similar car-lease service wherein you can take a car on a long-term lease and put it for rental on days you’re not using the car. Some M&M cars are also on the platform.

However, M&M offers brand new cars that are shown as a sale by it and the customer gets the registration certificate under his or her name along with the leasing company’s name. Once the lease ends, the person can return the vehicle to the company without the hassle of reselling it, and get a new vehicle.

M&M has partnered with Orix and ALD Automotive as lease partners but the lease will be under the Mahindra Leasing brand.

Target customers

Mahindra’s lease offering will cater to individual leasing for working professionals and SMEs and will be available across Pune, Ahmedabad, Bengaluru, Hyderabad, Mumbai and New Delhi in the first phase.

“The new offering, once mature, will give us additional revenues of up to 4-5 per cent,” Parthasarathy said. In its next phase, the lease offering will be extended to 19 more cities across India. The lease will be available on Mahindra’s vehicles such as the KUV100, TUV300, Scorpio, Marazzo and XUV500.

According to Veejay Ram Nakra, Chief of Sales and Marketing, Automotive Division, Mahindra & Mahindra Ltd, “With this, we hope to help our customers fulfil their aspiration without owning the vehicles, thereby elevating customer-engagement experience to the next level.”

Mahindra will be offering the lease option through specialised sales executives at M&M showrooms. in select cities where the customer will be given various options of leasing to choose from.