Mahindra Plans to Launch Three New Vehicles in 2015

New Delhi: Auto major Mahindra & Mahindra plans to launch three new vehicles, including two compact SUVs, next year as it looks to strengthen its position in the domestic market.

In the two-wheeler segment, the firm which is in the process of acquiring 51 per cent stake in Peugeot Motocycles for 28 million euros, is eyeing various global markets besides India to launch the French firm's products.

"We were slow on launches in 2013 and 2104. Now we are back with new launches. In 2015, we will launch two sub-4 meter compact SUVs and one light commercial vehicle. All the three would come on completely new platforms," Mahindra & Mahindra executive director Pawan Goenka told reporters.

The company is also in the process of developing new series of engines with its Korean arm Ssangyong, he added.

Earlier this year, M&M had announced plans to invest Rs 4,000 crore at the Chakan plant to take the overall capacity to 7.5 lakh units annually when fully operational. The fresh infusion would take its total investment in Chakan to Rs 8,000 crore.

In 2013, the company had announced plans to invest Rs 10,000 crore in three years.

Commenting on the plans with Peugeot Motocycles, Mr Goenka said: "We are looking at ASEAN region, particularly Vietnam, North African countries and India to launch products from the Peugeot Motocycle portfolio."

He said, however, that it was "hard to say" as to when two-wheelers from Peugeot stable could be launched in India as the current models are expensive.

"The products in their current avatar would not be feasible for India due to pricing. We will have to do some market research as see what products would suit Indian requirements," Mr Goenka added.

Last month, Mahindra Two-Wheelers, a fringe player in the domestic market, had inked a pact to acquire 51 per cent stake for 28 million euro (over Rs 215 crore) in Peugeot Motocycles, part of the 54 billion euro French auto major PSA Group.

He said Mahindra could do a market research after February next year when the acquisition process is completed.

"India is certainly on for us but at the same time it is not a burning issue," Mr Goenka said.

When asked if the company could look at utilising the French firm's manufacturing resources for Mahindra Two Wheelers, Mr Goenka said: "Certainly, it is possible. There are two possibilities. First one is motorcycle brand Mojo, which we plan to launch in India in next six months and thereafter in international markets.

"Secondly, we will start producing electric scooter GenZe in the US next year. We are keen to take this product to Europe also."

On Mahindra's strategy to turnaround Peugeot Motocycles, Mr Goenka said: "We need to work on two levels. Firstly, we need to see how we can lower the material costs and secondly how to increase margins. At this moment I cannot say when we will be able to achieve break-even but I will be happy if it happens in 2-3 years.

"There is no magic wand. All such acquisitions take time to turnaround... We have plans."

The key focus areas would be to make the brand stronger in terms of scooters, developing products for mass markets, global expansion of the brand and synergies with Mahindra Two Wheelers, especially in product development.

There is no intention of outsourcing manufacturing to low cost countries, Mr Goenka said.

Peugeot Motocycles, which is also known as Peugeot Scooters, has registered losses for a decade now. It produces two-and three-wheeled scooters with 50cc to 400cc engines.

The company sold 79,000 scooters in 2013.

Mahindra Two-Wheelers, with sales of around 100 million euros, currently contributes a small portion to the overall turnover of Mahindra group which stands at over 12 billion euros.

Mr Goenka said it was imperative for Mahindra to sell around one million vehicles annually in the two-wheeler business to be a meaningful player in the segment.

"We sold just about 2 lakh units last year, so we need to sell five times more to be a meaningful player in the segment," he said.

When asked about the current automotive market conditions, Mr Goenka said: "We are witnessing a very fragmented recovery in the domestic market. It is not a uniform recovery as some segments as well as some companies are doing well while others are still struggling."

He said though certain segments like two-wheelers were doing well and commercial vehicles emerging out of the slowdown, there were still segments like light commercial vehicles which were de-growing.

"It is very uncertain market condition in India right now...anything going wrong in the economy can put us on a downward spiral," he added.