M&M's Thar Roxx May Sell 10,000 Units A Month But Cannibalisation A Challenge

Mahindra & Mahindra Ltd.'s five-door variant of its best-selling SUV – the Thar Roxx – has the potential to clock sales of up to 8,000–10,000 units per month, according to brokerages.

Thar Roxx will appeal to customers looking to buy SUVs in the over Rs 40 lakh segment, which consists of the Hyundai Creta, Kia Seltos, and MSIL Grand Vitara, according to Nomura. The brokerage expects sales to climb to 8,000–10,000 units per month with a likely booking of 50,000 units on the first day, that is, Oct. 3, 2024.

There is a warning though. There could be high cannibalisation with the Thar 3-door variant currently selling 5,000–6,000 monthly units.

Built-in sales of 10,000 a month are projected for the Thar family in fiscal 2026, with upside risks. M&M's Thar targets of being number one may require it to sell 15,000 to 18,000 units per month, Nomura said.

The brokerage maintains that the company's SUV sales can grow by 15% annually over fiscal 2024–2027.

M&M has a market share of 27% in the Rs 12.5 lakh-SUV segment, and it is aiming to make the 'Thar' brand number one in this category, according to Moran Stanley.

The brokerage expects both the 5-door and 3-door variants to clock in sales of 8,000 to 9,000 units per month. It maintains M&M will be the fastest-growing personal vehicle company in India and sees a strong jump in sales in the coming months, driven by festive demand.

Both Nomura and Moran Stanley maintained a 'buy' call on the Mahindra & Mahindra stock, with a target price of Rs 3,417 and Rs 3,304 apiece, respectively, implying an upside of over 20% from the previous close.

The automaker unveiled the five-door variant of its best-selling Thar SUV on Thursday at a starting price that belies the competition at hand.

The Thar Roxx has a starting price of Rs 12.99 lakh for the petrol variant and Rs 13.99 lakh for the diesel variant, the company said during the launch event in Kochi on Wednesday. The base models are rear-wheel-drive only. The full pricing across variants will be announced on Thursday. 

The Roxx aims to attract those customers who skipped the Thar, citing practicality as a concern. That’s sorted by the rear doors. The SUV boasts an abundance of features, such as a panoramic sunroof, a Harman Kardon audio system, infotainment touchscreens, and an instrument cluster. Thirty-five safety features come as standard.

India's SUV market has been heating up in the last few years as customers move towards premium segments with rising disposable income.