Mini Xylo to take on compact cars
Mahindra & Mahindra (M&M) is looking to do a Nano by rolling out the country’s first sub Rs 5-lakh sports-utility vehicle — a compact version of the Xylo — this year, two people familiar with the development said.
The country’s largest utility vehicle maker is quietly working on introducing a mini version of the Xylo in the Rs 4.5-5 lakh range, or 35-40% cheaper than the existing base model, by 2011, they said on condition of anonymity.
The company hopes to achieve this by shortening the length of the vehicle to within four metres so it attracts a lower excise duty of 10% compared to 22% for bigger cars and utility vehicles, they said.
Mahindra & Mahindra officials declined to comment.
If it manages to bring down the Xylo’s price to less than Rs 5 lakh, the SUV will enter a price band that accounts for 60% of the country’s car sales and directly compete with compact cars such as the Maruti Suzuki WagonR, A-Star, Hyundai Santro, i10, GM Beat, Ford Figo, Fiat Punto and Tata Indica.
When it launched the Xylo in January 2009, M&M wanted the vehicle to challenge mid-level sedans, or three-box cars. Now it wants the mini Xylo to take on mid-level hatchbacks, or compact cars.
The compact Xylo will sport a much smaller engine than the 2.5-litre diesel engine that powers the vehicle now and Mahindra is yet to decide on the number of seats in the new vehicle, said one person close to the development.
Compact SUV market is an untapped segment in India where the only available vehicle is the recently launched Rio, a 5-seater SUV marketed by Premier. It uses body parts from a Chinese auto company Zotye and is priced in a range of Rs 5.6-6 lakh. Premier has sold around 200 Rios since January 2010.