Mahindra joins small car race with Verito Vibe

MUMBAI Wed Jun 5, 2013 4:58pm IST

1 of 2. Pawan Goenka, President of Automotive and Farm Equipment Sectors at Mahindra & Mahindra, poses with the newly-unveiled Mahindra Verito Vibe compact car in Mumbai June 5, 2013.

Credit: Reuters/Vivek Prakash

Related Topics

Stocks

   

MUMBAI (Reuters) - Mahindra and Mahindra(MAHM.NS), India's largest sports utility vehicle maker, has made its first push into the country's small car market a week after warning that fierce competition could erode its dominant SUV position.

SUV sales have been a strong point for some manufacturers in India over the past year, even as sales of the smaller cars that account for most of the passenger vehicle market slumped.

Having a presence in the small car market will be a positive if demand returns in the next fiscal year, but Mahindra will have to compete with established brands such as Maruti Suzuki India Ltd (MRTI.NS) and South Korea's Hyundai Motor Co (005380.KS).

On Wednesday, Mahindra launched the Verito Vibe, a compact version of its sedan, at a starting price of 563,000 rupees - among the cheapest of its passenger vehicles.

"Verito Vibe gives us the opportunity to play in the large and highly competitive compact car segment," Pravin Shah, head of Mahindra's automotive division, told reporters.

The flagship company of the $16 billion Mahindra Group builds every other SUV sold in India, but its share in the segment fell to 48 percent in the fiscal year that ended in March from 56 percent a year earlier, according to data from the Society of Indian Automobile Manufacturers (SIAM).

In the passenger car segment, which excludes utility vehicles and vans, the company last year held less than 1 percent of the market that is dominated by Maruti Suzuki.

Key to Mahindra holding its market share is not a small car but more SUV launches, some analysts say.

"Mahindra will continue to lose market share in the overall passenger vehicle industry, because of lack of new launches (by Mahindra) in the SUV segment and an extremely competitive environment thanks to launches by their competitors," said Yaresh Kothari, an auto analyst with Mumbai-based Angel Broking.

Renault SA's (RENA.PA) Duster has become popular in India since its introduction last year, and Mahindra must also compete with automakers including Ford Motor Co (F.N) and Japan's Nissan Motor Co Ltd (7201.T), both of which are expected to launch SUVs this year. (Reporting by Aradhana Aravindan; Editing by Daniel Magnowski)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Election 2014

REUTERS SHOWCASE

TCS Results

TCS Results

TCS net profit rises 51.5 percent, sees stronger sales growth.  Full Article | Quote 

Election 2014

Election 2014

Promises and more promises: India’s parties pitch their visions.  Full Article | Full Coverage 

India Markets

India Markets

Sensex slumps 207 points, at 2-1/2 week closing low.  Full Article 

Telecom Sector

Telecom Sector

RComm to raise mobile call tariff by up to 20 percent  Full Article 

Chinese Economy

Chinese Economy

China economic growth slows to 18-month low in first quarter  Full Article 

New Direction

New Direction

CEO Nadella pushes data culture at Microsoft.  Full Article 

Bitcoin ATM

Bitcoin ATM

China gets first bitcoin ATM, skirting bank crackdown.  Full Article 

Strong Sales Volume

Strong Sales Volume

Small is beautiful for Coca-Cola as volumes soar in China  Full Article 

Breakingviews

Breakingviews

Diageo throws money at Indian empire-building  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage