‘Every major launch is challenging’

It is already being touted as one of the most critical SUV launches for Mahindra & Mahindra. The TUV300 makes its debut less than a fortnight from now and will take on well-established rivals like the Renault Duster, Ford EcoSport and the more recent Hyundai Creta.

To that extent, the TUV 300 is an important part of M&M’s growth story which has lost ground over the last couple of years due to the absence of a compact SUV in its portfolio. This is when other manufacturers made merry and competitive pressure increased as a result. Is the TUV300 M&M’s most challenging phase since the launch of the Scorpio 15 years ago?

Executive Director, Pawan Goenka, does not quite subscribe to this view. “Every major launch that we do is challenging in some sense. This is because no matter how much we have worked on a product, taken market inputs or how much we have priced it, we do not know what is going to happen until we see actual customer response,” he says. The message is loud and clear: nobody can guarantee if a product will succeed irrespective of the hard work that has gone into its making. Yet, Goenka says the silver lining in the cloud is that M&M is fortunate to have had more successes than failures.

“The customer is very demanding and you need to have the right product, pricing, features, performance and looks. And if you fail in any one of these, it is goodbye,” he candidly adds.

This is where the TUV 300 becomes significant especially when M&M is in a “sort of” volume de-growth phase. Along with the S101 that will follow in the coming months, these two products are expected to bring back the kind of volume growth that the company has been more familiar with for many years now.

“From that viewpoint, the success of this product is very important for us. I would like to think that we have all the ingredients for success built into the TUV 300 and hope it will give that kind of success that we are looking for,” says Goenka.

He is also reasonably confident that the auto industry will grow well in the second half of this fiscal even while there is a section of people who are not as optimistic. “There is no reason why we should not come out of the current slowdown situation that we have seen,” says Goenka.

As he puts it, trucks have been growing for 11 months and cars for five quarters in a row which clearly show that there is good, consistent growth in some pockets. Tractors are not in the best of shape though this was expected and this is perhaps true for light commercial vehicles too. Motorcycles, likewise, have been having a rough time for some months thanks to poor rural offtake.

As Goenka says, the desire of an Indian to own a personal mobility solution (be it a car or two-wheeler) is very high and this is backed by affordability. “If anything, affordability is becoming better and better every year simply because income levels are going up faster than prices of vehicles,” he says. Yet, there could be some obstacles to free spending with inflation generally heading the list. This is the time income increases are eaten up by other priorities at home, especially food. Today, the situation is a lot better with inflation “more or less under control” leaving more disposable income at hand.

Interest rates, likewise, have come down to “reasonable levels” while the third positive relates to sentiment. It is a result of job security, good rains, positive economic growth, and so on. The only drawback can happen if a drought like situation persists and this seems a grim possibility. “In that case, it could derail growth and I am hoping that it will not happen. Nobody knows and we will have to wait and see,” says Goenka.