Mahindra may delay XUV500 export to satisfy domestic demand

 With an aim to first satisfy the domestic demand for its newly- launched sports utility vehicle XUV500 model, automobile major Mahindra and Mahindra (M&M) proposes postponing its export plans, said a company official Saturday.

"The demand for the model is good even at this price point (Rs.10.8 lakh to Rs.11.95 lakh ex-showroom New Delhi). We have got bookings for 5,000 units within a week of its launch in five cities. The waiting period for the model is around 17 weeks now. Our capacity is to roll out 2,000 units per month. So we may have to postpone our export plans for the model further," Pawan Goenka, president, automotive and farm equipment sectors, told reporters here on the sidelines of the 16th Asia Pacific Automotive Engineering Conference.

"We are looking at markets like Australia, Chile and neighbouring countries. Our plan is to ship the model out of India. Earlier we had planned to cater to these markets six months after the domestic launch. But with the demand booming we may have to postpone the new export markets further," Goenka said.He said M&M will leverage its South Korean acquisition Ssangyong in five areas - international distribution, product development and sharing of vehicle platform, sharing of component aggregates, component sourcing and launch of Ssangyong model in India next April-May.

Goenka said Ssangyong had over 1,200 showrooms in the world and was strong in Russia, Western Europe, Chile and China while M&M was strong in Chile, South Africa and neighbouring nations.

On the development of vehicles with Ssangyong, he said: "We have decided on two or three models to be developed on common platform. How much common parts they would have and the cost savings derived would be known only later," Goenka said.

On sourcing of components, he said M&M deputed an official to South Korea to look at sourcing and deriving economies of scale.

According to him, M&M was planning to invest around Rs.5,000 crore (over $1 billion) over the next five years in new product development and component manufacturing.

Queried about the company's new electric vehicle Mahindra Reva NXR to be launched soon, he said the vehicle with lithium ion battery and had a longer range.

"Compared to the existing models the price will be slightly on the higher side," he said.

To a query whether it would be better for the government to fund research on electric vehicles instead of subsidising vehicle purchase, he said: "The investment in research will be huge and the government may not be able to fund it."