rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Nashik strikes a setback for Mahindra's Xylo

Nashik strikes a setback for Mahindra's Xylo

May 12, 2009 09:21 IST

Barely four months after Mahindra & Mahindra rolled out the Xylo, a multi-seater utility vehicle that got a good market reception, the model has ran into a production hurdle.

The company's Nashik plant, where the Xylo is made, has been paralysed for the past five working days due to an intense labour strike.

Says Rajesh Jejurikar, M&M's chief of operations (automotive sector): "The strike will alter delivery schedules. There has been no change in demand."

Although M&M had to ramp up Xylo's production to more than what was projected, it has been falling short of the demand. The company started with producing 60 Xylos a day, which was more than doubled to 135 recently. Despite this, dealers are asking customers to wait for four-six weeks for delivery.

Meanwhile, the 4,400-strong workforce, which has gone on an indefinite strike at Nashik, has refused to relent to any of the management's overtures. Union leaders says M&M has delayed signing a salary agreement for 22 months.

M&M says it is working on a back-up plan. Apart from Nashik, the company has vehicle manufacturing plants at Zaheerabad (near Hyderabad), Hardwar and Kandivli (Mumbai). However, all these plants make other vehicles -- pick-ups, soft-top utility vehicles, three-wheelers, light commercial vehicles and buses.

Meanwhile, Xylo's prime competitor, Innova from Toyota Kirloskar, has seen a spurt in production. The company has upped the vehicle's output from 3,000 a month to 3,300.

Sandeep Singh, deputy managing director (sales and marketing), Toyota Kirloskar Motors, said, "Sales of the Innova have gone up after the face-lift it received earlier. The spurt has come from the personalised segment of buyers and from corporate buyers. We are hiking its production to 4,000 units by July to keep pace with the demand."

City-based analysts say M&M will lose new buyers if Xylo's production is not restored soon, the benefit of which will go directly to Toyota's Innova. Toyota officials say the company does not intend to run any promotional scheme, as the Innova already has a waiting period of four weeks.

Swaraj Baggonkar in Mumbai
Source: