XUV700 :In a strategic move that has sent waves of excitement through the Indian automotive market, Mahindra & Mahindra has announced significant price cuts on its flagship SUVs—the XUV700 and Scorpio—as part of its year-end bonanza for 2025.
This unexpected decision comes at a time when most automotive manufacturers are implementing price hikes due to rising input costs, making Mahindra’s strategy particularly noteworthy and consumer-friendly.
A Counter-Cyclical Pricing Strategy
While the automotive industry has been grappling with inflationary pressures and escalating commodity costs throughout 2024-25, Mahindra has opted for a bold counter-cyclical pricing approach. The company had initially announced a price increase of up to 3% across its SUV and commercial vehicle range effective January 2025, citing the standard reasoning of “rising input costs.” However, in a surprising reversal that has caught both competitors and consumers off guard, Mahindra has instead implemented substantial price reductions on select variants of its bestselling models.
The timing of this announcement is particularly strategic, coming just as competitors are finalizing their year-end pricing strategies and as consumers are making purchasing decisions for the new year. Industry analysts believe this move is designed to capitalize on pent-up demand and consolidate Mahindra’s dominant position in the premium SUV segment.
XUV700: Massive Price Cuts Across Key Variants
The XUV700, Mahindra’s technology-laden flagship SUV, has received the most substantial price revisions. The top-spec AX7 and AX7L variants have seen reductions of up to Rs 75,000, making this premium offering significantly more accessible to aspirational buyers.
The price reduction breakdown for the XUV700 is as follows:
- AX7 Petrol AT 7S and AX7 Diesel AT 7S variants: Uniform price cut of Rs 45,000
- AX7L Petrol AT 7S variant: Substantial price reduction of Rs 75,000
- AX7L Diesel MT 7S variant: Price cut of Rs 55,001
- AX7L Diesel AT 7S variant: Price reduction of Rs 50,000
It’s worth noting that these reductions apply exclusively to the 7-seater configurations of these variants, leaving the 5-seater versions at their original price points. This targeted approach suggests Mahindra is specifically looking to boost adoption of its family-oriented configurations, perhaps in response to market feedback or shifting consumer preferences toward larger capacity vehicles.
Additionally, some mid-range variants have also received substantial price cuts:
- AX5 Diesel AT 7S variant: The most significant reduction of Rs 70,000
- AX5 Petrol MT 7S, AX5 Petrol MT 7S with ESP, and AX5 Diesel MT 7S variants: Uniform price revision of Rs 50,000
- AX3 Diesel AT 7S and AX5 Diesel AT 5S variants: Price reduction of Rs 20,000 each
With these adjustments, the XUV700 range now starts at Rs 13.99 lakh and extends to Rs 25.64 lakh (ex-showroom), representing excellent value for a vehicle in this segment.
Scorpio: The “Big Daddy” Gets More Affordable
Not to be outdone by its more premium sibling, the iconic Scorpio lineup—comprising both the Scorpio Classic and the newer Scorpio N—has also received attractive price cuts, though more selectively applied across the range.
The Scorpio Classic’s base S trim leads with the highest discount of up to Rs 1.25 lakh for MY24 models, while the S11 trim receives a more modest reduction of Rs 90,000. For the MY25 Scorpio Classic, discounts have been scaled back somewhat but remain significant, with the base S variant receiving a Rs 90,000 reduction and the S11 trim seeing a Rs 44,000 price cut.
For the more modern Scorpio N, the reductions are more targeted:
- MY24 Z2 and Z8S variants: Benefits of up to Rs 35,000 and Rs 40,000 respectively
- MY25 Z4 and Z6 variants: More modest benefits of up to Rs 20,000
These price adjustments have positioned the Scorpio range between Rs 13.62 lakh and Rs 24.54 lakh (ex-showroom), maintaining its reputation as a value-for-money proposition in the mid-size SUV segment.
Market Context and Strategic Implications
Mahindra’s price reduction strategy comes against an interesting market backdrop. In July 2024, the company had implemented a separate price cut on the XUV700, which it clarified had no connection to the Uttar Pradesh government’s hybrid policy that waived registration tax on strong hybrid cars. Instead, Mahindra emphasized that the price reduction was part of its ongoing business strategy to lower average price points and drive growth—a strategy first outlined in an analyst meeting in February 2024.
This consistent approach suggests Mahindra is playing a longer game, focusing on volume growth and market share expansion rather than short-term profit maximization. The strategy appears to be working, with new XUV700 bookings reported to be 23% higher in June compared to May, contradicting reports of unsold inventory.
The timing of these price cuts is particularly noteworthy as Mahindra prepares for significant model updates in 2025. Both the XUV700 and Scorpio N are slated to receive feature upgrades next year, including potential additions like an augmented reality-based heads-up display and a next-generation 1400W, 16-speaker Harman Kardon sound system for the XUV700, and a bigger 10.25-inch touchscreen, digital driver’s display, 360-degree camera, and Level 2 ADAS for the Scorpio N.
By reducing prices now, Mahindra may be clearing inventory ahead of these model refreshes while simultaneously building goodwill and expanding its customer base.
Global Reach of Mahindra’s Price Strategy
The price reduction strategy isn’t limited to the Indian market. In Australia, Mahindra has launched an end-of-financial-year special on both the XUV700 and Scorpio, cutting $3,000 from the price of each model. Available until June 30 or until stocks last, the Australian Scorpio is now priced from $38,990 drive away, with the XUV700 at $39,990 drive away. Notably, the upper-spec XUV700 AX7L is now priced the same as the entry-level AX7 in the Australian market, representing exceptional value.
Technological Prowess Remains Uncompromised
Despite the price reductions, both vehicles maintain their impressive technical specifications and feature sets. The XUV700 continues to offer a choice between a powerful 2.0-liter mStallion turbo-petrol engine producing 200 PS and 380 Nm of torque, and a 2.2-liter mHawk diesel engine available in two states of tune (155 PS for MX variants and 185 PS for higher variants). Both engines can be paired with either a 6-speed manual or a 6-speed automatic transmission.
The SUV’s feature list remains comprehensive, including dual 10.25-inch screens (one for infotainment and one for the driver’s display), a panoramic sunroof, a 12-speaker Sony 3D sound system, ventilated front seats, a 360-degree camera, and Level 2 ADAS features.
Similarly, the Scorpio maintains its rugged appeal with its body-on-frame construction and choice of powerful petrol and diesel powertrains, coupled with modern amenities that have been continuously upgraded since its introduction.
Industry Implications and Competitor Response
Mahindra’s aggressive pricing strategy has put pressure on competitors in the mid-size and premium SUV segments. Traditional rivals like Tata Motors (with the Safari and Harrier), MG Motor (with the Hector and Hector Plus), and even Hyundai and Kia (with the Creta, Alcazar, and Seltos) now face enhanced competitive pressure.
Industry analysts will be watching closely to see if other manufacturers follow suit with their own price reductions or if they choose to compete on other parameters such as feature enhancements, warranty extensions, or financing incentives.
Consumer Benefits Beyond Price
While the headline-grabbing price cuts are the most visible benefit for consumers, Mahindra’s strategy offers additional advantages. By making these premium SUVs more accessible, Mahindra is enabling a broader segment of customers to experience advanced features like ADAS, panoramic sunroofs, and premium audio systems that were previously available only at higher price points.
Furthermore, as new model updates are expected in 2025, early adopters of these price-reduced models may benefit from stronger resale values if the updates are evolutionary rather than revolutionary, as anticipated.
For budget-conscious buyers, Mahindra has also highlighted the option of considering pre-owned XUV700 and Scorpio models, which offer even greater savings while still providing the core experience of these popular SUVs.
Electrification on the Horizon
As Mahindra implements these price reductions on its internal combustion engine (ICE) models, the company is simultaneously preparing for an electric future. The XUV700 is set to spawn an electric version, likely to be called the XEV 7e, which is expected to debut at the Bharat Mobility Global Expo 2025.
Interestingly, Mahindra’s price cut strategy doesn’t appear to extend to its electric lineup. The company’s recently launched electric SUVs, the BE 6e and XEV 9e, are reportedly unaffected by price adjustments, indicating a differentiated strategy for its electric and conventional portfolios.
Additionally, Mahindra is developing petrol-hybrid variants of both the XUV700 and Scorpio, expected to launch in 2026. These models will be the first from Mahindra to feature petrol-hybrid powertrains, reflecting the company’s multi-pronged approach to powertrain evolution.
A Consumer-Friendly Move in Uncertain Times
Mahindra’s decision to slash prices on its flagship SUVs represents a bold, consumer-friendly move in a market characterized by inflationary pressures and rising costs. By making these aspirational vehicles more accessible, Mahindra is not only expanding its potential customer base but also reinforcing its brand positioning as a value-oriented premium manufacturer.
For consumers contemplating a new SUV purchase, these price reductions present a compelling opportunity to acquire feature-rich, technologically advanced vehicles at more accessible price points. Whether this opportunity will persist through 2025 remains to be seen, especially with planned model updates on the horizon.
As the automotive industry continues to navigate challenging global economic conditions, Mahindra’s contrarian pricing strategy could well set a new benchmark for how manufacturers balance growth ambitions with pricing power—potentially benefiting consumers across the industry if competitors are forced to respond with their own value enhancements.
For prospective buyers, the message is clear: Mahindra’s year-end bonanza for 2025 offers a rare window of opportunity to acquire premium SUVs at significantly reduced prices, making now perhaps the ideal time to consider these popular models