Mahindra & Mahindra ( M&M ) Two Wheelerson Monday launched its globally positioned 110-cc scooter, Gusto, with aggressive export plans and hopes of claiming a bigger share of the fast-growing domestic scooter market.
Despite being in the twowheeler market for six years now, M&M still rides on the fringes. In August it sold 12,598 units; total two-wheeler sales was around 1.3 million units, according to industry body SIAM.
Mahindra’s two-wheeler business also continues to make losses. At the end of 2011-12, it had accumulated losses of Rs. 527 crore.
However, president of M&M’s automotive and farm equipment division, Pawan Goenka, is not worried — for now. “Our first priority is not financial break-even. It’s a long-haul business. So we are first focusing on getting the product and volume. Once that happens, the profits will come. We think that we need to get to a volume of 1 million a year or about 80,000 a month (domestic and exports),” said Goenka.
M&M will star t expor ts almost immediately, shipping the Gusto to Nepal. “We begin exports to Nepal in the next couple of days. We will launch it in other neighbouring countries in January-March and go to Africa and Latin America in the second quarter next year,” said Rajesh Jejurikar, CEO, farm equipment and two-wheeler division.
Jejurikar echoed Goenka that it was not a target but a scale that the company would need to reach to be a significant player in the market. He was hopeful that M&M’s best-seller, the Centuro bike, and the Gusto will help boost volumes.
Gusto is M&M’s first scooter in the 110 cc segment and the first to be developed indigenously at its R&D centre in Pune. It will be sold in two variants priced at Rs. 43,000 and Rs. 47,000 (exshowroom Delhi). Prices will be eventually increased, probably after Diwali, the company added.