To encourage three-wheeler drivers to upgrade to four-wheelers, by shelling out R 15,000 to R 20,000 more, Mahindra & Mahindra has launched Gio Compact Cab. Priced at R 1.95 lakh, just 7-8% more than the prevailing prices of three-wheelers, M&M has developed the Gio Compact Cab on the platform of its light commercial truck Gio. The company wants to create a new segment between Bajaj’s three-wheeler and Tata’s light truck Ace.
The company has set a production capacity of 24,000 units a year at its Haridwar facility for Geo Compact Cab. “The product has been launched in Bihar and within the next couple of days it would also be launched in Uttar Pradesh,†Mahindra & Mahindra senior vice-president marketing (automotive division) Vivek Nayer told FE.
He said M&M would launch the product in other parts of the country by the first half of the year. Nayer said that the decision to enter the segment has been prompted by the vast potential of the product in places that have relatively lower connectivity. “We are very clear in our focus with this product. Our primary markets are in the tier 2 and tier 3 cities where mobility for people is still an issue,†said Nayer.
The company is banking on its increased passenger capacity vis-a-vis three-wheelers for attracting drivers. Nayer added, “As per our calculations, a three-wheeler driver who carries passengers from one side of the town to the other would have up to 27% higher earnings owing to the increased capacity of the Gio Compact Cab.†The total size of the segment is around 4-lakh units per annum and dominated by the three-wheeler Piaggio which accounts for 60% of the market.
An auto analyst with a global consultancy firm said that while the domestic automotive would continue to experience growth, it would be the peri-urban regions of the country that is going to see increased segmentation in passenger vehicles. “The rural market is a big pie. It is natural that companies would want to penetrate the market with special customised products,†the analyst said.