M&M XUV700 price cut: Mahindra says no connection with UP govt's registration sop

Mahindra & Mahindra clarified on Wednesday that the recent price cut for its popular SUV, the XUV700, has no connection to the newly announced hybrid policy by Uttar Pradesh. The company's fully-loaded AX7 range of the XUV700 now starts at Rs 19.49 lakh, reflecting a price reduction of over Rs 2 lakh.

The UP government on Monday completely waiving the registration tax on strong hybrid cars, with customers potentially saving up to ₹3.50 lakh

In a regulatory filing, Mahindra & Mahindra stated, "We wish to inform the stock exchanges that there is no linkage between the price cut on certain XUV700 variants and the UP EV/hybrid policy as reported by some media."

The price reduction is part of Mahindra's ongoing business strategy, first outlined in their analyst meeting on February 14, 2024. The strategy emphasizes lowering the average price point to drive growth. This initiative began with the launch of the AX5 select variant in May 2024 and includes a limited-edition 3rd anniversary celebration variant of the XUV700, available for four months. These actions were planned based on material cost savings and are not expected to significantly impact the company's financials. Demand for the XUV700 remains strong, and production capacity has been increased accordingly.

In June, new XUV700 bookings were 23% higher than in May, contradicting reports of unsold inventory by certain news outlets. Mahindra maintains that hybrid technology is an interim and costly solution, and the company is prepared to deliver high-quality products across all consumer preferences.

Despite the strategic price cuts, Mahindra & Mahindra's share price fell by 6.89% to Rs 2,725.50 at 2:30 pm, marking its steepest intraday drop in about a year and leading the list of Nifty losers.