M&M launches cheaper XUV at Rs. 10.95 lakh

In its bid to arrest sliding sales of its once popular premium SUV, XUV500, India's largest utility vehicle manufacturer Mahindra and Mahindra (M&M) on Wednesday launched a cheaper entry level-version of the vehicle —W4.

Offered only as a two-wheel drive option, W4 is cheaper than existing versions of the vehicle by over ₹1 lakh. It is priced at ₹10.95 lakh. XUV500 got off to a flying start after its launch in October 2011, but struggled after the launch of compact and cheaper SUVs like Renault Duster in 2012 and more recently the Ford EcoSport earlier this year. Sales were also affected by higher taxes introduced in this year's budget.

"The launch of the W4 model makes the XUV500 proposition accessible to more customers who aspire to be proud owners of XUV500," said Pravin Shah, chief executive, automotive division, M&M. "In spite of being an entry-level model of the XUV500, the W4 model is technology-laden and with this launch, we aim to attract sedan and compact SUV buyers who wish to upgrade to the XUV500."

After the Union budget, when excise duties on utility vehicles with ground clearance more than 170mm, was raised by 3%, XUV sales were directly hit and fell to a low of 1,377 units in June. M&M reacted the next month and reengineered the car to reduce its ground clearance in July but its impact on sales has been limited. In the first seven months of this financial year, XUV sales have declined by 42.5% from 26,875 units in 2012-13 to 15,429 units in 2013-14.

The W4 is powered by a 2.2 litre diesel engine that develops a maximum power of 140 bhp and torque of 330NM.

It comes with a six-speed gearbox, has a rated fuel economy of 15.1 kpl and a ground clearance of 160 mm. The original XUV had a ground clearance of 200 mm.