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MG Motor India Pvt. Ltd plans to introduce its fourth sport-utility vehicle (SUV) model over the next two months in a bid to challenge the dominance of Hyundai Motor India Ltd and Kia India Pvt. Ltd in the growing market for mid-size SUVs.

The MG Astor model will offer some of the latest automotive technologies such as level 2 of autonomous driving technology and artificial intelligence (AI)-based customer assistance.

MG, a unit of China’s SAIC Motor Corp., is expected to launch the Astor before Diwali which falls on 4 November this year. This will be the company’s fourth product after the Hector and Gloster SUVs and the ZS electric SUV.

Competition in the mid-size SUV segment will increase with car market leader Maruti Suzuki India Ltd set to launch its first product next year.

Rajeev Chaba, president and managing director, MG Motor India, said the management’s target is to pitch MG as an aspirational brand through products such as Hector and ZS EV and subsequently launch a smaller SUV to generate volume.

“We will be offering autonomous level 2, which is not present in any of the competing products in the segment. This will be a big differentiator in terms of safety and the AI intelligence feature will offer convenience to customers. I think the young customers would prefer the Astor due to the differentiation that we are creating through technology," he said.

Compact and mid-size SUVs have been gaining traction over the past five years in India’s passenger vehicle market as a growing number of customers especially in the urban markets are choosing such vehicles over hatchbacks and sedans.

MG Motor will enter the mid-size SUV segment when a global shortage of semiconductors has hit the production plans of automakers. Also, the second wave of the pandemic has dampened consumer sentiment, though automakers are expecting decent sales during the upcoming festival season due to pent-up demand and increasing shift towards personal mobility.

“On the demand side, we don’t see any problem and this will only increase because of festivities coming up. Demand is high due to pent-up demand, revenge buying and more travel within the country. Issue is the supply side due to shortage of chips and shipping is also very chaotic and the situation has not improved at all," said Chaba.

He said the issue of chip shortage is expected to last for six months to a year, which will impact the short-term production plans of automakers.

Chaba said while MG Motor intends to introduce the Astor before Diwali, a final decision will be taken after analysing the availability of semi-conductors.

Most passenger vehicle manufacturers had low dealer stocks when production was stopped due to an explosive rise in coronavirus cases. Hence, most started to ramp up production from June to replenish inventory ahead of the festive season.

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