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M&M Suv price cut: M&M XUV700 price cut: No link with UP’s policy, move was part of plans announced in Feb, Mahindra says

Automaker Mahindra & Mahindra on Wednesday clarified that there is no linkage between its recently announced price cut of XUV700 variants and Uttar Pradesh‘s electric vehicle/hybrid vehicle policy.”The announced price cut of XUV700 is a continuation of our business strategy execution that was articulated in our 14th February 2024 analyst meeting where we clearly outlined that we have to bring the average price point down to drive growth,” the company said in a stock exchange filing.

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“We kickstarted this effort with the launch of AX5 select variant in May 2024 and have also brought in a 3rd anniversary celebration variant for the higher-end XUV700 for a limited period of 4 months,” M&M said.

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The company has clarified that these are ‘well deliberated’ actions which were incorporated in its business plan based on the material cost savings it realized earlier.

Shares of M&M were trading with deep cuts of around 7 per cent as of 2:15, while benchmark indices were down 0.8 per cent.

“We note that the overall volume of XUV700 has been around 6,000/month (15% of M&M’s overall SUV volume), and as per our understanding, the Top 2 trims of the model (AX7 and AX7L) account for around 50-60% of volume,” said domestic brokerage firm Axis Capital in a report rating M&M with an ‘add’ and a target price of Rs 3,150 while stating that they are positive on M&M in the sector.

What is Uttar Pradesh’s EV policy?

Uttar Pradesh, the second-largest car market in India, has waived registration fees for strong hybrid and plug-in vehicles, reducing their cost of ownership by 10%. Currently, EVs are taxed at 5% while hybrids face a 43% tax. Maruti Suzuki’s shares emerged as top gainer on Dalal Street following this development on Tuesday.

Previously, cars priced above ₹10 lakh incurred a 10% registration charge, but this fee has been eliminated as of July 1, resulting in price reductions of ₹1.5 lakh to ₹3 lakh, depending on the model and variant, according to a Maruti showroom sales manager in Noida.

“We firmly believe that hybrid is an interim and costly solution. And, we have the readiness to offer high quality products for all solutions that our consumers desire,” M&M said.

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