Mahindra & Mahindra, the largest utility vehicle maker of the country, has officially declared the new prices of its iconic Sports Utility Vehicle (SUV) XUV500. The move has been taken considering this year's Union budget, wherein the government imposed increased duties on all those models, which have a ground clearance of more than 170 mm. Therefore, Mahindra has reduced the ground clearance of XUV500, which brought down the prices of all the three variants of XUV500 by up to Rs. 30,000. With the announcement of new prices, the base variant of XUV500 has been now offered with a price tag of Rs. 11.85 lakh, whereas the other two versions are offered for Rs. 13.40 lakh and Rs. 14.44 lakh, respectively.
As per the 2013 Union Budget, the models having a ground clearance of more than 170 mm or an engine capacity above 1.5-litre are now entitled for a tax liability of 30 per cent, which were earlier charged at 27 per cent. This approach brought the Mahindra XUV500 under a higher slab of excise duty, and it became much difficult for the company to continue offering it competitively in the Indian auto market. It must be noted that the ground clearance of the car has been now brought to 160 mm, after reducing it by 40 mm. Also, the company has equipped a skid plate, in order to protect the engine of the XUV500.
Sources close to the development process stated that the Indian utility vehicle major is also planning to introduce a lower price variant of the XUV500 in the Indian car market to improve its sales. Mahindra is also said to be working on the development of a new compact Sports Utility Vehicle (SUV), codenamed S101, which is expected to square off against the recently introduced Ford EcoSport and upcoming Maruti XA Alpha.