Mumbai: Indian sports utility vehicles and tractors major Mahindra & Mahindra (M&M) has launched new models of Scorpio and also reduced prices of the premium sports utility vehicle by Rs70,000 to Rs25,000.

M&M may also slash prices of the Bolero, but would raise the price of the Xylo, its recently-launched multi-purpose vehicle .

With the price cuts the the new Scorpio VLX will cost Rs9.2 lakh or Rs70,000 less, while the low-end LX model will be cheaper by Rs25,000 at Rs7.2 lakh.

The Scorpio has also been upgraded to meet Bharat Stage 4 emission norms, which are set to be enforced in a year's time. 

Pawan Goenka, president M&M (automotive sector) said the price cuts would reduce the price differential between Scorpio and Xylo and help reduce cannibalisation between the two vehicles.

M&M said it has pumped in Rs50 crore for the new Scorpio, which with a revamped look was launched so that the Xylo doesn't cannibalise Scorpio, its ace product.

The launch also fortifies its presence across all the corners of the UV market with other products in its portfolio like Bolero, a value-for-money, entry level utility vehicle (UV), and Xylo, a multi-purpose vehicle.

Company executives revealed that there had been cannibalisation of almost 25 per cent between the two sports utility vehicles since the Xylo was launched.

Goenka further said, ''The launch of new Scorpio is a well thought-out move. The company conceived the idea before the introduction of Xylo, but could not make it public for obvious reason. Now, the cannibalisation between the two products will come down. However, there will be some cannibalisation, which we are okay with.''

Goenka also said the company has been able to cut the price of the Scorpio on the back of a reduction in commodity prices. ''We have also done value-engineering on Scorpio. So now we are passing on the benefits to our customers," Goenka said.

He however added that prices of Xylo would go up by Rs10,000-Rs12,000.

The new Scorpio will be produced at the company's Nashik plant on the same line as Xylo, which has a capacity to together produce 55,000 units a year. The company will produce 100 Scorpios per day, to be ramped up to 200 per day as the demand picks up.

Goenka said the company was re-positioning Scorpio to maintain the brand. The mHawk engine, which was earlier used only in VLX model, would now be used across the board.

He said the SUV market in India was only 20 per cent of the total car market in India against 40 per cent in Southeast Asia. He said that the new launch would enable M&M to increase its share in this segment substantially.

M&M will launch the new Scorpio in the US by the year end, while its plans for launching the Scorpio, Bolero, Xylo and pick-up trucks in China have been cancelled. The company has also put off the launch of a seven-seater Logan. Also with the new launch, the earlier models of Scorpio have been phased out.

The company  sold around 84,000 utility vehicles till February-end this year against last year's 85,000 in the same period. M&M launched the Scorpio in 2002 and has so far has sold 160,000 units of the vehicle in India and around 20,000 overseas. The vehicle also went for a major facelift in March 2006.

It now commands a 55-per cent share of the domestic utility vehicle market and hopes to close this year with an 8 per cent -10 per cent growth over the past year.

 M&M has a wide range of utility vehicles from the bottom-end with soft tops including Commander (recently renamed Major) and Max.

The company's highest selling model is the Bolero, including Camper, at around 5,000 units a month, followed by Scorpio which sells around 2,200 units a month.

For April to February, M&M has sold 49,660 Boleros, 27,000 Scorpios, 4,000 Xylos and 3,000 units of Max.