Mahindra & Mahindra (M&M) has lost significant market share in the utility vehicles (UVs) segment to foreign companies like Renault, Ford, Nissan. Though it is still the local leader in utility vehicle (UV) sales, its market share has fallen to 42 per cent at the end of the FY 2013-14, from more than 55 per cent two years earlier. Renault has grabbed about 9 per cent of the market with the Duster, while Ford holds 8.68 per cent with its sub-4-metre EcoSport. M&M was caught napping with no new launches to combat competition from foreign companies like Renault, Ford, Nissan, etc. A year back, analysts had expressed concern over the ageing models of M&M. Even now, dealers express difficulty in marketing and convincing customers with no new line up of new models.
M&M’s range of utility vehicles (UVs) are run on diesel. So, what used to be its unique selling proposition three years ago (when petrol prices were rising faster than diesel), is today a drag on sales. The continuous rise in diesel prices over the last year (almost 12%), along with higher excise on diesel vehicles has raised the cost of ownership and break-even time for utility vehicles.
Auto analysts forecast that M&M sales would gain momentum only when new products are launched from the next calendar year. This is hard to fathom, especially after the company has outperformed industry averages, even when its peers were hit by the slowdown. Investor disappointment is mirrored in the stock performance too. M&M’s shares dropped during the last one week while other listed auto companies’ shares moved up smartly.
#mahindra & Mahindra is losing on UV battleground pic.twitter.com/D0n01cfsoT
— Press Release Watch (@PrReleaseWatch) September 12, 2014
M&M’s range of utility vehicles (UVs) are run on diesel. So, what used to be its unique selling proposition three years ago (when petrol prices were rising faster than diesel), is today a drag on sales. The continuous rise in diesel prices over the last year (almost 12%), along with higher excise on diesel vehicles has raised the cost of ownership and break-even time for utility vehicles.
Auto analysts forecast that M&M sales would gain momentum only when new products are launched from the next calendar year. This is hard to fathom, especially after the company has outperformed industry averages, even when its peers were hit by the slowdown. Investor disappointment is mirrored in the stock performance too. M&M’s shares dropped during the last one week while other listed auto companies’ shares moved up smartly.
