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| Edited By: Neha Rishi |Source: DNA |Updated: Mar 16, 2018, 06:19 AM IST
Mahindra & Mahindra (M&M) has gained a first-mover advantage by creating a new segment between the mini-trucks and the three-wheelers, but Tata Motors with its Penguin (0.5 tonne) and Piaggio with its 0.5 tonne four-wheeler are also inching closer to their launch dates.
M&M has launched a 0.5 tonne four-wheeler pick-up cargo carrier — GiO.
This new segment will enable upgrades from three-wheelers and may see some downgrades, too.
Rajesh Jejurikar, chief of operations (automotive sector), M&M, said, “The mini-truck market size is 1,10,000 vehicles and the three-wheeler is 68,000 vehicles annually. We will cater to the combined numbers of the two, wherein we will see an upward and downward migration between the two ends.”
M&M has priced this product at Rs 1.65 lakh. A mini-truck costs close to Rs 2,78,000 and a three-wheeler Rs 1,38,000.
“So by paying Rs 30,000 more, a three-wheeler customer can easily upgrade to a better and more powerful product,” Jejurikar said.
This product is likely to start eating into the three-wheeler market, where Piaggio is the leader.
M&M, too, sells 900 units monthly of its Alfa and the company is not worried about the canabalisation that is likely to be caused by GiO.
Jejurikar said, “The three-wheeler market may no more be there as upgrades will happen due to products like GiO. However, there will always be customers who would not be able to cough up additional cash for the upgrades. But if we feel that Alfa numbers become insignificant and difficult to sustain it, then we would consider stopping its production.”
However, Ravi Chopra, chairman and managing director, Piaggio Vehicles, said, “The three-wheeler category cannot be wished away only because a new segment is created above it. Be it M&M, Tata Motors and us, we are all trying to create a new segment with the 0.5 tonne four-wheeler and there will be some overlapping, but how many three-wheeler customers are willing to pay Rs 30-40,000 more and upgrade?,” he asked.
“Also with the creation of this segment, the downward migration will not be from Ace and Ape plus truck but it might take place for Ape truck and M&M’s Max Maxxi truck,” he said.
Over the past 2-3 years, M&M’s only competitor in pick-ups, Tata Motors, shifted focus to low-end carriers, specifically the one-tonne Ace, which has served the company fantastically.
M&M has spent Rs 25 crore on developing GiO and Pawan Goenka, president (automotive sector) said that it was possible to develop a new product with low investment as the company used its existing platforms and in-house tooling capacity fo developing a new platform for GiO The engine technology was outsourced from the US based Kohler.
About 60% parts for GiO have been taken from Alfa platform, and the new platform will see many more products, including an electric vehicle.
