The XUV300 is Mahindra's secret weapon!

The auto major is eyeing 20 per cent of the compact SUV market with the petrol and diesel variants of the XUV300, reports Shally Seth Mohile.

Mahindra and Mahindra is looking to corner 15-20 per cent market share in the competitive compact SUV segment with its about-to-be-launched offering -- the XUV300.

It will also launch an electric version of the model in 2020.

Based on the Ssangyong Tivoli platform, the sub-four metre, five-seater model will compete with Ford Ecosport, Suzuki Vitara Brezza and Renault Duster and go on sale in the first half of February.

"The XUV500 is a very successful model. The Cheetah-inspired model is really liked by consumers. Therefore, we thought it makes sense to take the heritage of the model forward. Though the platform is coming from Ssangyong, the design is unique in every sense," said Pawan Goenka, managing director, M&M.

With the exception of South Korea and China, where Ssangyong has a strong presence, M&M can sell the model in all other markets.

Mahindra will be offering the XUV300 in petrol and diesel variants. This could include the 1.5-litre diesel engine and a newly developed 1.2-litre G80 turbocharged petrol engine.

As of now, Mahindra will not offer an automatic version.

For a segment that is showing signs of sales cooling off and saturation, M&M's entry could be delayed, said analysts.

"It's not going to be easy, considering that the segment has established models like the Brezza," said Puneet Gupta, associate director, IHS Markit.

A volume of 7,000 to 8,000 units a month will be tough, he said. A lot, he added, will depend on the pricing.

Also, once Mahindra dealers start retailing the Ecosport as part of the deal between the two firms, there will be potential cannibalisation, Gupta said.

But Mahindra is confident.

"Depending on the value proposition and the price as well as the brand's positioning, there is still space for another model in the compact SUV segment," said Veejay Nakra, chief of sales and marketing at the automotive division of M&M.

Mahindra has learnt this lesson the hard way. In the absence of a contemporary designed model that can pose a challenge to rivals, Mahindra lost market share in the utility vehicle segment -- first to Renault and Ford and then to Maruti Suzuki.

Launched in 2016, the Suzuki Vitara Brezza had turned out to be a runaway success.

Photographs and video: Kind courtesy Mahindra & Mahindra