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

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

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