M&M launches four-wheeled goods carrier Gio news
29 Oct 2009
Mahindra & Mahindra has launched a 0.5 tonne four-wheeler pick-up cargo carrier -- Gio priced at Rs 1.65 lakh, which the company says is the cheapest mini truck in the country.
The Gio is claimed to deliver 27 km to a litre and virtually creates a new segment in the goods carrier space with four wheels instead of three. According to the company the vehicle is meant for plying within towns and cities and is aimed at rural and semi-urban consumers.
M&M feels that there is a ''need gap'' between three-wheeler pickups and the existing mini-truck segment occupied by the Tata Ace and Piaggio's Ape Truk. It hopes that the Gio will capture the space occupied by three-wheeler goods carriers (which cost Rs 1.38 lakh) as well as mini trucks (Rs 2.78 lakh plus). Three wheeler goods carriers have annual sales of 68,000 units while the mini-truck category is higher at 110,000 units.
The Gio is fitted with a petrol engine developed by Kohler of the US. M&M has targeted exports to SAARC countries in six months. Next the company has planned a 0.8-tonne four-wheeler that will compete with the Ace and Truk is scheduled to be launched by the end of the year.
Rajesh Jejurikar, chief of operations (automotive sector), M&M, said, ''We will cater to the combined numbers of the three wheeler goods carrier market as well as the mini truckmarket, wherein we will see an upward and downward migration between the two ends."
According to Jejurikar a mini-truck costs close to Rs278,000 while a three-wheeler costs Rs138,000, and so by paying Rs30,000 more, a three-wheeler customer can easily upgrade to a better and more powerful product," he said.
Analysts say the Gio is likely to start eating into the three-wheeler market, where Piaggio is the leader. M&M's three wheeler goods carrier Alfa sells 900 units monthly the company is not worried about the canabalisation that may be caused by the Gio.
Jejurikar said, the three-wheeler market may soon cease to exist as upgrades will happen due to products like Gio. He said if Alfa's numbers become insignificant and difficult to sustain it, then the company would consider stopping its production.
M&M has spent Rs 25 crore on developing the Gio and Pawan Goenka, president (automotive sector) said that it was possible to develop a new product with low investment as the company used its existing platforms and in-house tooling capacity to develop a new platform for Gio.
The engine technology was outsourced from the US-based Kohler. The company says 60 per cent of Gio's parts are based on the Alfa platform. The new platform will see many more products, including an electric vehicle.
The Gio will be available at over 500 sales outlets through M&M's 150 dealers in the northern, western and eastern regions from this week. The next launch phase will see the Gio enter the southern market.
The vehicle is being produced at the Haridwar plant. Initial numbers will be 20,000 units annually going up to 30,000 units.
According to Jejurikar, "We are launching Phase I immediately in which the truck will be available in north, east and west of India."
In Phase II the vehicle would be launched in January in the south. ''The product will be sold in 500 outlets through 152 dealers when we have a pan-India operation," Jejurikar said.
Market watchers say competition in the four wheeler goods carrier space may soon hot up with Tata Motors coming up with its Penguin (0.5 tonne) and Piaggio with its 0.5 tonne four-wheeler.
