Mahindra is set to roll out cheaper version of the popular SUV XUV500. The low cost XUV500 model comes with 160 mm ground clearance which will enable it to save 3% excise duty. Pawan Goenka, president of Mahindra & Mahindra said: "The price of the XUV500 will go down by between Rs 27,000 and Rs 33,000 as we produce the vehicle with the new specifications."
The Union Budget earlier this year announced excise duty of 30% on SUVs having engine capacity over 1,500 cc and ground clearance above 170 mm, as against 27% before. However, this move has hit hard domestic auto makers like Mahindra and Tata. So auto makers have started to incorporate certain changes to avoid the 3% higher excise duty on vehicles.
Goenka also expressed changes are possible in other Mahindra vehicles too, but no final decision has been taken. Mahindra & Mahindra popular models including Bolero and Scorpio too attracted higher excise duty. When asked whether the upcoming low cost XUV500 will have lower performance as an off-roader, Goenka answered a “stone guard” has been added under the engine to protect from uneven roads. Besides the lower ground clearance, the XUV500 will have other changes such as brakes, clutch systems and electronics.