It was a big day for Mahindra & Mahindra with the launch of its compact SUV, the TUV300, at its Chakan plant near Pune.
As he took the stage, Anand Mahindra, Chairman of the Group, remarked that the first thing that struck him about this product was the passion that went into its making. “Last night, I meet the teams in the plant and saw the passion and excitement. These are two traits that are a competitive advantage in this business,” he said.
According to Mahindra, it is this level of passion that is so important, particularly in the auto sector which is seeing tremendous mobility dynamics at play in a rapidly changing environment. “Potentially, the bigger threat is from the age of access. We live in an age of the Olas and Ubers and transportation is a commodity that will be given to you,” he said.
As Mahindra put it, young people would then rarely need to own something like a vehicle. Yet, he added, they will still buy things they love or fall in love with and this is where the TUV300 is expected to play an important role for the company.
“I may sound like the flower child of the ‘60s but love is strategy. If you do not get passionately committed people, you will never create something that people will love,” said Mahindra.
Will the TUV 300 make people love it? From his point of view, it is authentic and comes from a legacy/heritage accompanied by modern styling and, of course, passion. “You can look at the TUV300 without it shouting for attention. I am glad my wife is not here today because I have fallen in love with somebody else. I love the TUV300,” said Mahindra jocularly.
While the company would not ignore the growing number of fleet operators, it was still keen on making a strong connect with customers. “People also want to experience (vehicles) as India grows affluent and leisure time increases. What we do on weekends is now critical and it is about an experience,” said Mahindra.
While changing transport dynamics would, in turn, change the imperatives of product development, he was confident that M&M was in a sweet spot of balancing fleet imperatives and customer experience. “Our core business is SUVs and our brand is very strong. I am optimistic about the future,” declared Mahindra.
Pawan Goenka, Executive Director, said it took four years to make the TUV300 a reality. M&M has been under competitive pressure lately as rivals like Renault and Ford which entered the compact SUV arena have made the most of the first mover advantage.
Yet, Goenka was confident that this would not be a big issue going forward as recently launched products like the new Scorpio, XUV 500, Thar and the sub-one tonne Jeeto were doing well. From a pricing point of view, the TUV300 has literally thrown down the gauntlet with an introductory offer of ₹6.9 lakh (ex-showroom Pune) for the T4 version going all the way to ₹9.12 lakh for the top-end T8 option.
Strategically placedThe new offering will also be part of a product category that is seeing rapid growth. According to Pravin Shah, President and Chief Executive, compact SUVs now take up 41 per cent of total (SUV) sales and the TUV300 will only increase the share of the pie. In addition, SUVs account for 23 per cent of passenger cars sold and this figure is expected to touch 30 per cent in the coming years.
M&M’s targeted customer for the TUV300 is someone who is confident and will not compromise easily. The team working on the project figured it had to be a product that was bold and macho yet stylish and affordable. It would also need to take on rough roads and offer the best in space and comfort.
With the sub-four metre clause thrown in additionally (to avail of lower excise duty), it was a tough challenge which involved a total investment of ₹1,500 crore, including the share of suppliers. The company plans to make 5,000 units of the TUV300 each month which will include exports to South Africa and neighbouring Asian countries.