Mumbai: Mahindra and Mahindra Ltd (M&M) unveiled the TUV300, the company’s compact sports utility vehicle (SUV), on Thursday at a starting price of 6.9 lakh (ex-showroom Pune).

The seven-seater, which comes only with a diesel engine, is priced up to 9.12 lakh for the top-end variant which showcases the AMT (auto gear shift) technology.

TUV300 is powered by the turbo-charged, three-cylinder M Hawk diesel engine. Designed and developed at the Mahindra Research Valley, the model will be produced at the company’s Chakan facility, near Pune.

Here are the five reasons that make the launch a critical one for Mahindra.

First new brand in four years: The TUV300 is Mahindra’s first new brand after a hiatus of four years. Mahindra launched the XUV500 in September 2011. To be positioned between the Bolero and flagship Scorpio model, the TUV300 is expected to address the needs of both urban and rural buyers.

First compact SUV offering: This is also the company’s first offering in the so-called compact SUV segment (sub-four meter) that has been designed and developed from scratch.

Recouping volumes and market share: The utility vehicle market in India has lately seen a surge in demand for compact SUV models that offer the comfort of a car along with the sportiness of an SUV. These models also enjoy lower excise duty benefits compared to traditional SUVs, enabling manufacturers to price them competitively.

In the absence of a compact SUV, Mahindra has ceded market share and volumes to rivals, including Ford Ecosport, Renault Duster and Nissan Terrano, among others. It has seen a dip in overall volumes despite new launches such as Hyundai Creta and Maruti S Cross.

The maiden launch in the segment, therefore, will be critical in helping the firm get back in the reckoning. In the four months to July, Mahindra’s share in the UV segment slipped to 36% from 38% a year ago. It used to be more than 40% till two years back.

Mahindra plans to sell close to 3,000 units of TUV300.

Going against the tide: Most compact SUVs in the market today have a monocoque structure. In a bid to create a strong differentiation in the competitive SUV market, Mahindra has chosen the ladder frame design over the monocoque one. Mahindra’s Scorpio too has a ladder frame structure, while the XUV500 has monocoque. In the absence of any model from rivals that are ladder frame-based and positioned in the mass SUV market, Mahindra expects the TUV300 to help in turning around its sales which have been on a decline for more than two years now.

A strong comeback: Mahindra expects to make a strong comeback in the market with the new model. With a couple of new models, Mahindra hopes to bring the excitement back in the market, said the company’s top official at an interaction last Thursday, referring to the TUV and an upcoming second launch in the premium compact SUV space.

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