Rivals Face Competition as M&M Launches Cheaper XUV500 Model

Rivals Face Competition as M&M Launches Cheaper XUV500 ModelOn Wednesday , M&M (a part of Mahindra Group) India's largest utility vehicle manufacturer launched a cheaper entry level version of the vehicle -W4. This  move is thought to be an attempt to arrest the sliding sales of the once popular SUV, XUV500.

The newly launched  W4 vehicle priced at 10.95 lakh is over Rs. 1 lakh cheaper than the existing W6 model of XUV500.

The company was forced to launch this new vehicle as the sale of its passanger vehicles which include the Verito sedan, fell 15 per cent year-on-year for the first ten months of this calendar year.

With over 74,000 vehicles sold within two years of launch the XUV500 has been a part of the  success story for M&M. The economic slowdown, high interest rates and the resulting uncertainty in salary hikes and jobs market have also weighed on sales for M&M.

M&M's extremely successful Scorpio SUV also faced the music because of rising competition from Renault's compact SUV, the Duster and Ford's EcoSport.

The only vehicle which showed no slow down on its sales was the extremely successful Bolero as it is more popular in India's rural hinterlands. It has been unaffected by the economic slowdown. The sales are more likely to continue due to plentiful monsoons this year, which will gain plentiful income for the farmers.

Now the question is , will the M&M's rivals take a cue and initiate the  launch of cheaper models or cut prices for their already existing vehicles.