Mahindra & Mahindra is set to roll out cheaper version of XUV 500

"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,"  said by Pawan Goenka, president of Mahindra & Mahindra. 

Mahindra is set to roll out cheaper XUV 500 following some ingenious methods to make the car cheaper.
The company has reduced the ground clearance of its flagship model to utilize the lower excise duty. The ground clearance, which was 200mm earlier, has been cut to 160mm, giving the company a 3% savings in excise duty on the vehicle. 

"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," said by Pawan Goenka, president of Mahindra & Mahindra.

The companies like Mahindra and Tata bore the brunt of the new definition made by the government on the excise duty in the budget. The government had announced in the Union Budget earlier this year that SUVs having engine capacity of over 1,500cc and ground clearance upwards of 170mm will have to pay an excise duty of 30% against 27% before. While the government justified the higher duty on the "greater road and parking space" the vehicles occupied, many in the industry cried foul over the move as only a section of vehicles fell within the definition that slapped higher duty. These made the companies to make changes into their existing models to sustain into lower duty.

Apart from XUV 500, Goenka suggested that the changes would be made to other models also like Bolero, Scorpio as these vehicles also come into higher duty bracket but firm decisions has not been taken. Goenka was heard saying that the off road capabilities of XUV 500 would be affected owing to lower ground clearance. The company has installed a "Stone Gaurd" under the engine to protect from gravels, stone and un even road as the body is now more prone to ground contact but Goenka justified the decision by saying  "I am not happy about doing this, but we had to do it as the higher price due to the increased duty was hitting our potential customers." Given the new dimensions of the ground clearance in XUV 500, Mahindra has also made certain other changes to the XUV500 in areas like electronics, brakes and clutch systems. 

Other car companies in India are likely to follow the same trend to lower the price of their vehicles.