Mahindra to launch lower variant of XUV 500 this fiscal year

New Delhi: Auto major Mahindra & Mahindra will introduce a lower variant of its sports utility vehicle XUV 500 by the end of this fiscal in a bid to rev up sales in a sluggish market.

"We constantly keep on getting customer feedback and taking that into account, we plan to launch a lower variant of XUV 500 by the end of the current fiscal," Mahindra & Mahindra Chief Executive Automotive Division Pravin Shah told PTI.

Mahindra had launched the XUV 500 in 2011. It currently markets three variants of the model in the domestic market at a price range of Rs 12.13 lakh to Rs 14.77 lakh (ex-showroom Delhi).

XUV500 has clocked a cumulative of about 63,000 units so far in the 20 months since launch. After the initial euphoria, when the company had to even deliver the vehicle through draw of lottery, sales of XUV500 have tapered off. Last month, the company had sold 2,200 units of the XUV500.

Shah said the Indian automobile market has been on a downhill drive and despite unfavourable factors the company has been able to post positive sales growth.

"In FY13, utility vehicles segment grew by 50 per cent but in the first two months of this fiscal, it has grown by just 4 per cent. Within the UV segment, those which have come under the extra 3 per cent excise duty, sales have declined by 14 per cent so far in this financial year," he said.

The company is banking on new launches, including the new Verito Vibe, to push up sales.

"With the launch of Verito Vibe, we will expand our market opportunity five times to a million cars with this launch," he said.

M&M's total sales stood at 43,460 units during May 2013 as against 43,989 units during May 2012. Its passenger vehicles segment, including the UVs and Verito sedan, grew 5 per cent in May at 22,244 units.

When asked if the company is planning a fresh model change for its popular SUV Scorpio, Shah said declined to share details but said "it would be in due course of time".

The Scorpio has been holding its ground and sold 5,165 units in May, amid stiff competition from Renault Duster and Maruti Suzuki's MPV Ertiga.

On new product programmes, Shah said M&M is jointly developing engines of different capacities with its Korean subsidiary Ssangyong Motor Co which could hit the markets in the next two-three years.

"Currently six engines of different horsepowers and different fuels, including petrol and diesel, are being developed with Ssangyong," he said.