Mahindra doubles train dispatches amid trailer shortage as festive demand, GST cut lift SUV sales

Mahindra expects trailer-related logistics constraints to continue in October 2025.

Mahindra & Mahindra has doubled the use of trains to dispatch vehicles amid strong wholesales, aided by festive demand and Goods and Services Tax (GST) rate rationalisation. The company said the shortage of car trailers has affected dispatches industry-wide, leading it to rely more on rail transport to move its SUVs to dealerships.

The Scorpio-maker sold a record 56,233 units of SUVs in September 2025, registering a growth of 10.13% over 51,062 units sold in the year-ago month. The company reduced the ex-showroom prices of its SUVs by up to Rs 1.56 lakh under GST 2.0 and offered additional festive benefits of up to Rs 1.29 lakh.

In an interaction with Moneycontrol, Nalinikanth Gollagunta, CEO of Mahindra's Automotive Division and Executive Director of Mahindra Electric Automobile Ltd, said the shortage of trailers has been an industry-wide problem since September 22. "We have a fixed volume of trailers which are available across all the different original equipment manufacturers (OEMs). We are all focused on ensuring that we get our fair share of the trailers for us to run. But, of course, we are also risk-mitigating and using more trains. The railways have been quite helpful in providing those trains for us as well. So we will continue to go through that. Our expectation is we will have similar constraints in October as well, and we will have to actively work to ensure that we are getting the products to customers," he said.

Gollagunta noted that Mahindra has been using trains for a part of its vehicle dispatches and has now expanded that share. "We have had a certain percentage which are being transported through trains. And then, over the last two to three weeks, we have doubled that capacity to use trains. Of course, it is off a small base. But it definitely helps mitigate some of the constraints we have had on the trailers," he said.

The increase in rail-based dispatches comes at a time when the company is witnessing higher demand following the GST 2.0 rate revision. "The GST 2.0 has helped us with significant price drops across the board. If you take the XUV 3XO, for example, the top-end models have seen a price drop of more than Rs 1.50 lakh. We ensured that we are transmitting pretty much all of the benefits to the customer. We are not holding anything back. On September 22, we announced the formal pricing. But even before that, on September 6, we put out schemes to the effect of giving the same kind of benefit to customers," he said.

Mahindra launched the new Bolero and the new Bolero Neo on October 6. While the updated Bolero starts at Rs 7.99 lakh (ex-showroom), the refreshed Bolero Neo is priced from Rs 8.49 lakh (ex-showroom). The top-end variant of both models is priced below Rs 10 lakh (ex-showroom).

According to Gollagunta, Mahindra has made optimisations and improvements to ensure a stronger value proposition for the Bolero range. "We have done some optimisations and continuous improvement on the products to make sure that there is a very competitive value proposition we put out. We are happy that even the top-end models in the Bolero and the Bolero Neo are sub-Rs 10 lakh. So the entire portfolio is sub-Rs 10 lakh, which is an amazing proposition for customers," he said.

The Bolero range is currently operating close to full capacity utilisation. The Bolero is manufactured at Mahindra's Chakan and Haridwar plants, while the Bolero Neo is made at the Chakan plant only. The total capacity for the entire range is 9,000 units a month.

"We have stated a capacity of 9,000 units a month for the Bolero range. We will stay with that capacity at this point. We do not have any plans immediately to increase capacity. We want to see how it plays out. We intended to make sure that we have a product which is relevant and continues to be attractive for customers over a period of time. It is not that we were not using up our capacity before. We were doing over 1,00,000 units yearly. You are talking of roughly 8,500 units a month, which is close to 95% capacity utilisation right now," Gollagunta said.

He added that overall capacity expansion at the Chakan plant is already underway as part of the NU_IQ programme. "We are adding capacity overall. When we launched NU_IQ in August, we talked about capacity additions. The first phase will happen as a brownfield in Chakan, which will be up and running in about 18 to 24 months. So that will help us add capacity. But specifically for these products (Bolero and Bolero Neo), at this point, our intent was to make them as relevant and contemporary for our customers," he said.

The NU_IQ platform and four concept SUVs based on it -- Vision.S, Vision.T, Vision.SXT and Vision.X -- were unveiled on August 15. Their production for the Indian and global markets will start in 2027 at the Chakan plant, which will see an annual capacity addition of 2,40,000 units, taking the total capacity at the facility to 7,60,000 units.

While GST rate rationalisation and festive demand aided sales in September 2025, Gollagunta said predicting the future trend would be difficult. "It will be hard to predict whichever way it goes, but if you think about it from an affordability perspective, this clearly gives customers the ability to accelerate their purchase if they want to. But also, the second trend we are trying to see is the customer might have a fixed budget and they are able to upgrade themselves to buy a higher-end vehicle, which plays quite well for us as well, whether in terms of buying a higher-end variant or a higher-end model itself," he said.

Mahindra currently has four models in the sub-4 metre SUV category -- Thar, Bolero, Bolero Neo and XUV 3XO. " The sub-4 metre is definitely a distinct part of the market. It is almost 60% of the overall SUV market. If you look at it from a growth perspective, both sub-4 metre and larger SUVs are growing at an equal pace at this point. It is not like one is growing less or the other is growing more. Our ability to cater to both markets is quite important for us. And the fact that we have multiple products across different customer segments for the support is quite important for us to head to the overall numbers that we have now,” he said.

Among the larger Mahindra SUVs are the Thar Roxx, Scorpio Classic, Scorpio-N and XUV700. The company also has passenger electric vehicles (EVs) like the XUV400, BE 6 and XEV 9e.

Gollagunta observed that each model serves a specific segment. "If you see all the sub-4 metre models, the 3-door Thar has a distinctive segment it goes after. The XUV 3XO goes after a very urban segment. You have the Bolero and the Bolero Neo as well. Our endeavour is that we are able to give customers choices across all of the different form factors and that is really what we are trying to do, and that will help us ensure that if ever growth happens in one part of the market and not in the other part of the market, we are well covered in terms of offerings," he said.

On the rural-urban split, he said the balance remains stable through the year but changes during festivals. "It is very hard to now define what is rural and what is urban. But if you go by the traditional definition of PIN codes at the basic level, roughly speaking, we are about 60-40 between urban and rural, 60% urban and 40% rural. Now this is for the rest of the year. But when you have festive coming in, post-harvest season, you start to see a little bit more of rural playing out. It becomes more like 55-45, 55% urban and 45% rural. Sometimes it could be even higher, depending on how it plays or how the festive season plays out. But in general, you end up somewhere in the 60-40 to 55-45 range," he said.

On the future of powertrains, Gollagunta said Mahindra continues to focus on EVs while keeping an open view on other technologies. "We still have a strong belief that EV is the end state in the market. That is where we will all end up over a period of time. Whether 2030, 2035 or 2040, it is hard to say which way it will play out, but we know that strategically, that is the right answer for the country, and that is where we are focused," he said.

He referred to recent industry data to highlight the growth of EVs. "Even if you see our September numbers across the industry, VAHAN data showed sales of over 14,000 units for passenger EVs, which is a significant growth from what it was last year. The EV penetration across the industry has crossed 5%, and we are at 8% within Mahindra as well. All of this gives strong conviction EVs are the right bet to make," he pointed.