Every quarter Mahindra & Mahindra is planning to launch one new variant and thus planning to increase its retail footprints all-India significantly. Pravin Shah, President and Chief Executive (Automotive) Mahindra & Mahindra Ltd, unveiled their retail expansion plans during a one-on-one interaction with our correspondent Sunil Pol at the launch of the new version of XUV 500 in Mumbai.
What are your plans of increasing dealership centres across India?
Currently, we are operating through 380 dealers and total 1,500 touch points. We have laid expansion plans of increasing our dealership centres and touch points by launching one new variant and one new fresh car every quarter.
This means we are going to expand our product portfolio with the plan to launch more dealership centres and touch points in tier III and IV cities. We have a desire to meet the customer requirement of buying or servicing M&M automobiles within the radius of 20 to 25 km from his house.
We don’t count the number and don’t chase the numbers in terms of networks. We have a framed policy about how we need to distribute and serve the customers.
Any annual target of dealership centres with franchising?
I can say that there will be growing number of dealership centres opening in the market. We don’t chase numbers, if you love the numbers then at some other time you have to chase closers. We do it with the viability.
What is the investment amount you are putting for expansion plans?
The investment amount varies with the format on which we are planning for expansion. As a policy, we don’t add Mahindra owned dealership. We generally operate through franchise model so the investment number changes from model to model. I can say that we have much more value to offer associated with our brand considering the vast product portfolio in different segments.
What is your ratio of sale in rural and metro markets?
Presently, our rural penetration is somewhere around 37 per cent. Further, we have plans of increasing our rural market share. Overall, the M&M has very good rural presence. With the help of network expansion plans and existing network, our rural penetration is increasing.
Ratio of sale depends upon the need of the affordability and the need of the customer irrespective of the locations whether it’s a metro, rural or town. The XUV has the capability of taking on any roads and with all the drive options surely we share much better performance from the other competitors.
In today’s time, it will be fair to say that the traditional segmentation in terms of small cars, medium cars, big cars or SUVs has disappeared, what comes in the mind is what product one has to offer, at what price points, at what type of experience one is expecting and these become the fair amount reason on which people’s buying decision relies.
What’s your take on eCommerce five years down the line, for promoting M&M?
With growing eCommerce and transition in consumer behaviour and buying patterns, we will undergo the change within five years.
In India we have deep rooted offline retail sector association with customer psychology and behaviour and with mass employment. So in the future, we cannot predict the things. We need to reckon and we need to be constant of the facts.
I see eCommerce as exploding, but if you ask me, then I will say every commercial organisation has to stay with success. It is not only per say auto industry, the eCommerce is going to change the way we live and operate and transact. It’s changing by the day.
Today, it’s very difficult to say that eCommerce is a success. Yes, they are succeeding and we all have seen the benefits of that. But will these eCommerce market place service providers be profitably be existing on the basis of the valuation that they get? Time will only answer that question.
Don’t you think M&Ms entry into the compact XUV segment is a little bit late?
Yes, I have no hesitation in accepting that. But don’t forget the fact that people who define themselves as a part of SUVs must check that are they really SUVs. They should not only check based on the sales but the construction, the type of versatility for compact SUV -what one can expect from the compact SUV globally- do you get them or just these SUVs designed and made for substituting the fact. So, I guess, the consumer and the media need to judge and understand the fact much better.
How automotive industry is reviving from the sluggish growth last year?
With the economy exploring, prices are reducing and getting stabilised, and interest rates are likely to be softened, people are migrating and looking for the different type of product stores, so with this, we see that there is a scope for the XUVs and automobile industry to grow. Currently, YOY the industry is growing by five per cent.
What is your market share of SUV and XUV?
The entire SUV segment is over half a million cars and we are the market leader in SUVs with 54 per cent market share. And in XUV, we are still at a nascent stage and trying to capture the large market share.
What is your monthly sale of XUVs?
Our monthly sale of XUV is 3,000 and we are expecting it to grow attractively.
What is the price range of XUV 500?
XUV 500 is offered in four ranges that is, W4, W6, W8 and W10 at the price range of Rs 11.2 lakh, Rs 12.31 lakh, Rs 14.0 lakh and Rs 14.82 lakh respectively.