We attended M&M’s TUV300 launch at the company’s Chakan plant in Pune. Aggressively priced at R6.9 lakh and positioned as a rough-and-tough vehicle, the TUV300 appears better suited for semi-urban/rural markets and is the first of two new compact SUVs expected from MM this year.
Launches augur well for M&M’s auto segment volumes, but scanty rainfall in most parts of India has cast a pall on the tractor business. We cut estimates to build in lower volumes and revise our Sept’16 TP to Rs 1,330 (from Rs 1,400). Maintain hold.
M&M launched the TUV300 in seven variants, including an AMT version with pricing in the range of Rs 6.9 lakh to Rs 9.12 lakh (ex-showroom Pune). Slated as competition for the likes of EcoSport and Duster, the TUV300 will have a 1.5-ltr diesel engine, a tank-type build, Scorpio-type chassis and an engine similar to the XUV500 and Scorpio. In all, MM has spent ~Rs 1,200 crore on R&D, designing, tooling and engines.
MM can currently manufacture ~3,300 TUV300 units a month which will be ramped up to 5,000 vehicles in a month’s time. We believe the vehicle’s rough-and-tough positioning could find more takers in rural and semi-urban markets. M&M already dominates the segment with 75%+ share in its flagship Bolero and Scorpio models.
The new launch will likely give a fillip to volumes, but could also cannibalise on Bolero sales.
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