Mahindra pitches its only car as successor to the Ambassador

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Mahindra and Mahindra Ltd. plans to redesign the only car in its stable, Verito, to cater to the needs of India’s fast-growing taxi segment as it looks to fill the void created by Hindustan Motors’ Ambassador, a top executive at the firm said in an interview.

The CK Birla Group-owned Hindustan Motors sold the Ambassador brand to French company PSA Group in February. The Ambassador has a cult following among some retro-minded enthusiasts in the country. It was the vehicle of choice (or rather, given the limited choice, default) of thousands of owners since 1957 because of its sheer ruggedness and ability to maneuver India’s potholed roads. It was hugely successful in India’s small car market, and in particular with the government. This was, of course, before Maruti Udyog Ltd.’s Maruti 800 killed its appeal. Today, Maruti’s SX4 has replaced the Ambassador in government circles. The Ambassador was also the preferred vehicle for taxis.

Mahindra wants to occupy this space vacated by the Ambassador.

“Therefore, if we say that, let us focus that vehicle [Mahindra Verito] on the taxi segment alone, whether it is electric vehicle, gasoline or diesel, can we redesign that vehicle to become the next Ambassador in the taxi segment? That’s what we are working on right now,” Pawan Goenka, managing director of Mahindra and Mahindra, said in an interview.

“We will be looking at all the aggregators. Today, aggregators buy Verito but not in large quantity because it is more expensive than some of the other products in that category. If we can take care of that part of it, then it is a very desirable taxi vehicle,” he added.

To be sure, Verito has never been a runaway success. Born as Logan under a joint venture with Renault SA, it became Verito when Mahindra got full control of it after the partnership ended. Since then, the company has made several attempts to resurrect the brand, but for various reasons, customers have stayed away from the product. Goenka now sees it as a perfect fit for the taxi segment.

“What do you need in a taxi? You need a spacious vehicle, which is comfortable, runs from point A to point B, economically. If you forget for a minute about the looks, which is where we lose out, and if you look at the functionality of the vehicle, it is very difficult to find a vehicle in that size that will give you better functionality in terms of space, comfort [than the Verito],” he said.

Fueled by taxi demand
Mahindra’s new plan for the Verito is driven, in part, by the growing sales of cars as taxis amid the advent of cab aggregators Ola and Uber. Driven by demand for these app-based cab operators, as much as 17 percent of total passenger vehicles sold in the country by 2020 are expected to be sold in the taxi segment, estimates rating agency Icra.

But Mahindra may not be looking at cab operators only. Being the only maker of electric vehicles in India—it has two pure electric cars such as Verito Electric and E2O—the company is also looking to push sales through government channels. The Indian government itself wants to promote sale of electric and hybrid cars and in the process of drafting a policy on the subject.

A top officer in the ministry of road transport and highways told Mint that the Mumbai-based company is in talks with road transport minister Nitin Gadkari to initiate a pilot project of electric car taxis in Nagpur.

“Under the first phase, around 200 electric cars would be plied on the roads as taxis to see the results,” the officer said, requesting anonymity. The details of the project still need to be worked out. It remains to be decided if the government will buy these electric cars as taxis and run them under a public transport system or hire a company to ply them as private taxis.

MINT/NEW DELHI/TNS

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