They are the veterans of the Mahindra product stable and continue to be the top performers even today.
It is well over a decade since the Bolero and Scorpio hit Indian roads and these two SUVs account for monthly sales of nearly 14,000 units. Bolero’s share alone averages 9,000 units each month, which comfortably makes it the largest-selling SUV in the country.
M&M will have more reason to be pleased with the Scorpio, as it has outperformed competition three months running (July-September). Not too many people gave it a chance especially with models like Duster, but Scorpio has not only held its own, but surged ahead with May being its highest-ever sales at 5,165 units. “Old is indeed gold. These vehicles have proved their worth and keep surprising us,” says Pravin Shah, Chief Executive of M&M’s Automotive Division.
From his point of view, this good showing is especially helpful at a time when the automotive industry is going through its worst slowdown in recent times.
New features
Shah believes Scorpio and Bolero are doing well, thanks to the frequency of new refreshes and features. “In addition, they offer the benefits of reliability, low cost of operations and easy servicing,” he says.
What has also been an additional bonus are rural markets which are on an upswing with the good monsoons. Scorpio and Bolero are the best bets because they can weather the rough terrain in this part of the country.
Yet, Shah is concerned about the overall state of the auto industry.
“It is a difficult market situation. I have not seen such a lull for a long, long while,” he says. What is especially worrying is the state of the commercial vehicle segment, the barometer of any economy, which has been stagnant for nearly 18 months. Even while the CV industry is cyclical, this does not last over six months in the worst case scenario.
Shah attributes the auto sector’s poor health to high interest rates, the growing current account deficit and the fickle rupee.
“There is absolutely no positive sentiment,” he says. In this backdrop, the Government’s decision to slap an additional three per cent excise levy on SUVs (from 27 per cent) with a high ground clearance only made things worse.
This can be borne by the fact that while September saw overall SUV sales fall by 12 per cent, the now dearer ‘30 per cent’ category crashed 27 per cent.
SUV sales for the first half were down five per cent from last year’s level, and Shah does not expect the festive season to be particularly buoyant. Compare this to 2012-13 when SUV sales soared 52 per cent and the difference is just too palpable.
The good news
For M&M, the good news in the CV space is that its 2.5-tonne pick-ups have been growing at nearly 20 per cent, with a market share of 68 per cent.
In cars, the company expected better business from the recently launched Verito Vibe, but the ride has been rough with competitive products and high cost of imports (thanks to the euro). Localisation would be the logical way out, but this requires high volumes which are not happening now.