The last few years has seen quite a few attempts at breaking into the within the city transport segment, and Tata Ace has been the undisputed success story in the segment. Industry experts estimate that Ace has over 80% share of the 2,500crore small truck segment (one tonne capacity) and Ace can actually be credited with the creation of the segment. But this blog post is not about Ace, which I have written earlier, but about a new competitor which has entered the segment, Mahindra & Mahindra Gio, a 0.5 tonne small truck. The best part about the new launch is the price at which it is available Rs 1,67,000 which is at a slight premium versus the three wheelers and substantially lower than Ace which is around Rs 2,80,000. And in terms of carrying capacity Gio is able to take much higher load than the three wheelers. So in effect what Gio is also trying is create a new a segment for itself below Ace and just above the three-wheelers.
And over the next few years Gio will add to the credibility of India as a low cost automobile development center of the world.
In the company's official release Dr Pawan Goenka, President Automotive Sector says,
“With the launch of Mahindra Gio, we have created a new Compact Truck category in the commercial vehicle segment. The Mahindra Gio is the first of its kind entry level 4 wheel cargo vehicle, and is all set to change the dynamics of the small CV segment. As city limits gradually expand and distribution needs increase, the Mahindra Gio presents a high earning potential for customers who will benefit from its high mileage, low maintenance cost, optimum utilization of space and low acquisition cost,”
I think one element which both Ace and more recently Gio have been working on is to capture the pride associated with owning a three-wheeler versus a four-wheeler, and they have worked on that aspect by improving the driving comfort and styling in the driving cabin, with things like bucket seats, to give a feel-of-car, but then with Gio being priced so close to three wheelers one needs to see whether this would work for long.
But all in all I would rate Mahindra & Mahindra as one of those old economy companies which has responded very well to the opportunities brought out by opening up of the economy. The success it has had with Scorpio and Tractors in overseas market is something on which I deserves a separate post...