Mahindra and Mahindra is gearing up to launch its premium sports utility vehicle Rexton, built in association with Korean subsidiary Ssangyong Motor, by Diwali this year.

The auto major is investing Rs.1,500 crore (close to 300 billion Korean won) for developing a new platform of products with Ssangyong. Rexton SUV would be the first product under Ssangyong label, and the companies are developing new engines, both petrol and diesel, that could be used by both of them.

“We are expecting to develop three products with Ssangyong. The investment (Rs.1,500 crore) planned over three years is only for one product, and there will be more investments for other products,” M&M Automotive and Farm Equipment Sector President Pawan Goenka said.

He was speaking to reporters after formally launching the company’s new compact SUV (sports utility vehicle) Quanto here on Tuesday. Replying to queries, he said the overall sales expectation during the second quarter was lukewarm, with segments such as medium and heavy commercial vehicles registering de-growth.

But sales were expected to pick up following the announcements made by the Central Government on continuing the reform process in spite of resistance from some quarters.

He asserted that the prices of vehicles could go up, but by how much and when would depend on the assessment. “It will happen at some point of time,” he said.

There was slowdown in the auto industry in the first five months partly due to the strike at Manesar plant, but it would not be as slow in the coming seven months.

The industry was likely to register less than 10 per cent growth this year because of high interest rates, sentiment and slowdown , but it was hopeful of returning to double digit growth next year. M&M was in support of the diesel price hike claiming that the subsidies in the long run were unrealistic and unsustainable.

There would not be any significant change in the UV (utility vehicle) segment on account of diesel price hike while it would have a short-term impact on the commercial vehicles segment.

On the small cars side, there could be some migration to petrol vehicles, but it would be marginal.

Asked about exports, he said Mahindra and Mahindra registered 50 per cent growth in exports during the previous financial year, and it could do well during the current fiscal too. “Right now, export growth is about 6-7 per cent,” he said.

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