M&M shares fall 6.6% after company cuts XUV700 AX7 prices

Mahindra & Mahindra shares tanked 6.6% to ₹ 2,730.6 on July 10 after the automotive major cut the price up to ₹2 lakh for its top XUV700 variant, AX7.

The model now starts at ₹19.49 lakh compared to ₹21.4 lakh earlier, said the firm. The “celebratory pricing” will only be available for four months.

“The refreshed pricing aims to make the XUV 7OO even more accessible to a broader range of customers while providing exceptional value,” said M&M in the statement.

Following the trend, Tata Motors has also announced price cuts on its SUVs, Harrier and Safari, effective until July 31. These price reductions by major players indicate weakened demand in the segment. The reasons behind the trend could be reduced inquiries and postponed vehicle purchases, exacerbated by extreme heat waves affecting consumer behaviour.

Meanwhile, the XUV700 became Mahindra's fastest car to reach sales of more than 1.5 lakh units within 30 months of launch. XUV700 strengthened its Sci-Fi credentials by introducing the new 2024 line-up. The XUV700 is offered with petrol and diesel powertrain options.

On a global scale, the XUV700 has gained momentum in Australia, resulting in a large increase in retail sales. According to the company's FY24 annual report, the Scorpio-N is one of the top SUVs in the body-on-frame class in South Africa, while the XUV300 received the Golden Wheel 2023 award for "Best Seller in its Segment" in Tunisia.

In the previous session, auto stocks rose, with Maruti Suzuki up 7% on the Uttar Pradesh government's waiver of the registration tax on hybrid automobiles to encourage environmentally friendly vehicles in the state. M&M shares might also be sliding as investors take profits off the table. The stock has jumped 76% in the last one year. M&M stock is the leading laggard on Nifty 50 today.