Multi-utility strategy

M&M executives feel that the Indian utility vehicle market has underperformed so far. Jejurikar points out that utility vehicles account for just 15 per cent of car sales in India, whereas the Asian average is 40 per cent.

"If the 15 per cent penetration grows to about 20 per cent, it would mean a 15 per cent CAGR for over four years. Even without having to go to a level of 40 per cent, where most of Asia is now, making a movement of this kind will mean a substantial increase in the size of the category," Jejurikar adds.

Given this, it turns out that M&M considers the combined segments of sedans and utility vehicle its playground and has entrusted the task of permeating the sedan market to the Xylo. Jejurikar calls it the "increasing the pond" strategy. However, onlookers call it an improbability.

Why would a sedan owner, who loves the three-box, comfortable, spacious, low-stance look and feel of a sedan, junk his car and switch to an "angry looking" hulky off-roader from a manufacturer known for rugged utility vehicles?

On his part, Jejurikar is confident. "With the Xylo, we will fulfil the unmet needs of a sedan customer," he says. To support his argument, he refers to a TNS India Auto Need Segmentation report that studied the influence of emotive needs of customers on car purchases in India.

The study listed six key needs that drive the purchase of a car -- status, control, security, comfort, potency and liberation. Pradeep Saxena, who heads the auto research division of TNS India, says a sedan customer will move to a multi-purpose vehicle if he gets a better deal in four need segments: Space, comfort, status and potency.

M&M seeks to fulfill these needs through the Xylo's much-publicised features, says Nayer. Extended wheelbase, the seven or eight seat option and facilities such as flatbeds, foldable dining trays and parking sensors can take care of the space and comfort needs, he says.

The 2.5 litre CRDE engine from the Bolero, tuned for more power and torque, along with M&M's macho brand appeal can fix the potency bit. As for the status quotient, the "time of your life" campaign is aimed to "associate the feeling of having arrived in life with the ownership of the car," Nayer says.

"A multi-purpose vehicle perspective is that I can fit my family of seven or eight. But even if I have a family of four, there must be a reason for me to look at a product like the Xylo. Focusing on a consumer's aspiration is, we believe, a category changing trigger," Jejurikar adds.

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