Mahindra mulling at reducing ground clearance on SUVs in India

author image CarTrade Editorial Team
Tuesday 07 May 2013, 10:26 AM

Leading Indian utility vehicle manufacturer Mahindra & Mahindra could be looking at reworking the ground clearance and other features on some of its Sports Utility Vehicles (SUVs), in order to enable them to conform to the latest excise restrictions. The sales of company’s SUV portfolio have been substantially affected by the hike in excise duty on the same. As per the Union Budget 2013, excise duties on have gone up from 27 per cent to 30 per cent.

The new devised duty structure states that a vehicle with an engine displacement greater than 1.5 litre, length more than four metres and ground clearance over 170 mm, is capable of being classified as an SUV. As an example, reducing the ground clearance of the Scorpio will be a good start from the company. All the above mentioned three requirements have to be met. The additional advantage of doing so would be that the car would handle better, with this modification.

Pawan Goenka, President of automotive and farm equipment sectors at Mahindra & Mahindra, has said the company is looking at the process of modifying current vehicles to help them meet the new excise duty criteria. This could be in reference to the SUV codenamed S101, which would be a sub 4 metre version of the hot selling XUV500. Another such vehicle that is under development is the C-101. Both vehicles are expected to get engines and gearboxes jointly developed by Mahindra and Korean subsidiary SsangYong. Though the decision to have a length under 4 metres was already announced, it is the lowering of ground clearance that comes as a fresh development from the company.

Commenting on the declining SUV sales, Pawan Goenka said, “This trend is contrary to the 24 percent growth witnessed in April 2012. The increase of 3 percent excise has resulted in the decline, instead of growth in a segment which was the fastest growing till recently. Clearly, this is a big dampener and it has also affected the overall industry sales.” As per sources, company SUV sales have witnessed a significant 14 per cent decline in April 2013, as compared to April last year.

Vehicles that are used primarily for off-road duties, such as Thar, will not be affected due to an existing length of under 4 metres. Recent compact SUV Quanto will also not be affected due to the above mentioned reason. The XUV500 is not a vehicle that is used much for off-roading, but however, the company could look at creating newer models for those customers who wish to pursue the same. These could be developed as special editions, with the requisite ground clearances.

The long term implication of the excise duty rules is not very clear, but at the moment, sales for Mahindra are clearly hampered. Previously, it was one of the few companies to be posting positive growth figures, despite a gloomy market in general.

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