Mahindra and Mahindra, India's largest Utility Vehicle (UV) maker, is planning to play bullish on the Indian auto market as the company is looking ahead to introduce its Korean subsidiary, Ssangyong Motor during festival season of this year. The company is planning the launch of its premium Sports Utility Vehicle (SUV) Rexton, which is designed with the efforts of both the auto makers. Following this, the auto company will be investing a massive amount of Rs. 1,500 crore for the development of an all new platform for the Ssangyong products. Under the Ssangyong brand, Rexton SUV will be the first SUV in the line-up for which both the auto companies are designing the new engines, including both petrol and diesel.
On the new development, President of M&M's Automotive and Farm Equipment Sector, Pawan Goenka, quoted, “We are expecting to develop three products with Ssangyong. The investment (Rs. 1,500 crore) planned over three years is only for one product, and there will be more investments for other products.”
Speaking on the sidelines of Quanto's launch, Goenka further said that the overall sales expectations of the company in second quarter was not so aggressive as in segments like medium and heavy commercial vehicles it reported de-growth. However, the sales volumes are anticipated to attain pace following the declarations made by the central ministry on the continuation of reform process despite being resistance from past few quarters.
He said that the prices of models will eventually increase but commenting on this inflation cannot be done at this point of time. “It will happen at some point of time,” he said.
The Indian auto industry witnessed a slowdown between April and August 2012 mainly because of the violent riot at the Maruti Suzuki's Manesar plant, but experts believe that it will not affect the remaining seven months of the current fiscal. Reportedly, the auto industry will attain a growth of less than 10 per cent this year owing to the increase in fuel prices and interest rates. However, the speculations regarding attaining a double digit growth in the next fiscal are very strong.
Sources revealed that M&M was in the favour of increase in diesel prices as the auto maker stated that the philosophy of offering subsidies are unsustainable and unrealistic in the long run. According to the company officials, increase in the diesel prices will not bring a critical change in the Utility Vehicle (UV) segment, while on the other hand, it will affect the Commercial Vehicles (CV) segment for a short-term.
Considering the impact of diesel price hike on the sales of small cars, the buyers switching to the petrol vehicles will not be large and thus, the sales of companies will not be affected much. Speaking on the exports of auto maker, Goenka said that M&M reported a 50 per cent surge in last financial year and the figures are anticipated to improve even more in this financial year. While concluding the statement, he said, “Right now, export growth is about 6-7 per cent.”
