Mahindra may rework ground clearance on SUVs to reduce excise duty

Mahindra Automotive may rework the ground clearance of vehicles in a bid to reduce the excise levied on them. The Indian SUV major is one of the worst affected by the revised excise duty announced during the 2013 Union Budget, as the duty on SUVs has been hiked from 27 per cent to 30 per cent.

The new duty structure states that a vehicle is classified as an SUV, when it has an engine above the capacity of 1.5-litres, is more than four metres long and has a ground clearance of more than 170mm. The vehicle has to meet all three requirments to classify as an SUV-so lowering a Scorpio will be enough. Happily enough, this will also make the car handle better. 

Pawan Goenka, president of the automotive division, has said that it is possible for the company to launch products with engines of capacity less than 1.5-litres and less than four meters in length. Now he has added that they will work to redesign the vehicles to have a ground clearance of less than 170mm so as to escape the additional excise duty.

He has said that they are currently working on modifying their existing range to fit the requirements but added that all their SUVs will not be modified. It is also likely that he is referring to the S-101 compact crossover that was spied recently. The new vehicle will most be a compact version of the XUV500 and will be joined by another small car currently codenamed the C-101. Both vehicles are expected to use new engines and gearboxes being developed by Mahindra and its Korean subsidiary Ssangyong.

It will make sense to leave the clearance the same for the 4WD variants since those will probably see off-road duty. The Thar is shorter than four metres, so it will not be affected, neither will the Quanto. The XUV is not expected to see off-road duty, so lowering should not be an issue - again, maybe Mahindra can offer "Super XUVs" as limited editions, on the lines of their rally vehicles, for those who intend to do serious off-roading.  

Know more about the Mahindra S 101

Read our story on the Mahindra compact SUV 

Source: Young Turks FB page