Among the current crop of Mahindra & Mahindra passenger vehicles, the Xylo
are the weakest links. M&M’s focus is now to revive these models’ performance. For the April-October 2013 period, the Xylo
sold 9,302 units, a 40 percent fall from the 15,472 units it sold during the same period last year.
Its under-four-metre sibling, the Quanto, averaged a little over 700 units a month during this financial year, as compared to 4,279 units it sold during September, its first month of launch, and October. The coming months will see some action from M&M to push these two models, based on the same platform, in the market.
There’s a buzz that M&M may reconfigure the Quanto’s seven-seat arrangement and make it a five-seater to offer better space for the second row. There’s no official comment though for now, on what the new measures could be make the models more appealing to customers. M&M says that while it has discovered what measures need to be taken, it hasn’t figured out the reasons for the models’ weak performance.
“Even within the company, there’s no unanimous view on why it is not working. The marketing team has one view, the product team has its own, and the manufacturing team has another view. But we have got a fairly good grip on why the Xylo is not working as well as the Bolero, Scorpio, XUV or pick-ups,” says Dr Pawan Goenka, president, automotive and farm equipment sectors, M&M.
The Quanto and Xylo’s performances are in contrast to their siblings such as the Scorpio and Bolero. The Scorpio sold over 5,000 units in October, the highest since its launch in 2002. The company sold more than 10,000 units of the 13-year old Bolero last month. Could the Quanto be replaced by another model? Unlikely, at least not for a year or so. M&M prefers to give a model 5-7 years before taking a decision regarding its replacement. The Xylo will turn five in January 2014. A baby SUV codenamed ‘S101’ by Mahindra is expected to be launched in late 2014. This could either give company or replace the Quanto.
Replying to a query on withdrawing a weak product, Dr Goenka said, “In M&M we don’t work on the concept of number of years to breakeven but we work on an IRR (Internal Rate of Return). That is usually 5-7 years. In 5-7 years of a product, we should get a certain IRR. That doesn’t mean it (the project) breaks even in 5-7 years. In auto, it is not practically possible to withdraw a product after two years because of the high investments made in those projects.”
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