M&M's upcoming S101 will have the Wagon R in its sights

Change is constant, they say. And utility vehicle market leader Mahindra & Mahindra (M&M) is trying to keep pace with that change.

In an evolving market where the definition of a sports utility vehicle (SUV) has been expanded significantly, M&M's next product (a compact SUV codenamed S101) will try to woo a new segment of customers which is different from the customer profile of a Scorpio, XUV500 and even the latest TUV300's. It is the huge pool of compact car customers. During April-July 2015, India sold 380,000 compact cars, in other words 43 percent of the total passenger vehicle market during this period.

According to senior executives of two Tier 1 component suppliers, the S101 has been developed keeping in mind Maruti Suzuki's WagonR as the key competitor. The S101 will also mark M&M's entry into the petrol vehicle market, which contributed 65 percent of the compact car segment and 56 percent to the overall passenger vehicle segment during April-July 2015. The WagonR sold 165,000 units during this period, or an average of 41,300 units a month.

Talking about the evolution of the passenger vehicle market in the latest episode of The Autocar Professional Dialogue series, Dr Pawan Goenka, executive director and president (Auto and Farm Equipment Sectors), hinted that the S101 would woo compact car buyers with its price positioning.  He says, "The distinction between what we call SUV, sedan is all getting blurred. When a customer is looking to buy a car, it is not necessarily "I want to buy a hatchback, I want to buy a SUV"; it is "I want to buy a car at this price point". In that price point, the customer will look at what are the offerings available and they will straddle between a hatchback, a crossover SUV and sometimes even between a hatchback and a sedan, if a sedan comes at a price point of a hatchback. So, therefore it is more of a price-point game for majority of buyers." In the interview, Dr Goenka also clarifies that M&M has no plans of entering the car segment. It will target car buyers with SUVs or crossovers.

Sources say the S101 could even sport an entry-level price tag of Rs 4 lakh to cater to the very price- sensitive compact car buyer in India. The WagonR range, for example, starts at Rs 3.88 lakh (ex-showroom, non-metallic) in Mumbai. Maruti Suzuki is also rumoured to be working on a diesel variant of the WagonR. The UV, er compact, no, the passenger vehicle segment is headed for some interesting turns ahead.

Also watch: Part 1 of The Autocar Professional Dialogue with Dr Pawan Goenka