Despite seeing a partial reduction in the waiting period of its bestselling models, Mahindra and Mahindra (M&M) stated that it continues to witness a sustained demand for its Sports Utility Vehicles (SUVs) such as the XUV7OO, Scorpio-N, Thar, etc. A senior official of the Mumbai-based automaker said that it is still garnering an average of 51,000 units per month thanks to the semiconductor shortage easing off and production levels improving.
Rajesh Jejurikar, Executive Director (ED) and Chief Executive Officer (CEO) of the auto and farm business at Mahindra & Mahindra, told reporters in a post-Q2 FY24 earnings call, “The booking pipeline continues to be very strong as we have 2,86,000 units open bookings till November 1. The strong ones continue to be Scorpio, Thar, and XUV7OO. We continue to get 51,000 new bookings every month, and the cancellation rate stays below 8 percent.”
At present, M&M has an open booking of 10,000 units of XUV300 and XUV400, 70,000 units of XUV700, 76,000 units of Thar, 11,000 units of Bolero, and 1,19,000 bookings of Scorpio (including Classic). The company's average billing has been to the tune of 38,000 units with the ramp-up in the production of its bestselling SUVs.
“This booking and billing that we are doing is backed by a robust offtake. Our dealer stock in the second quarter (FY24) is in line with our norm of 30 days. We are prioritising the customer sequence and ramping up (our output) very rapidly. Even if the customer (who has booked our model) is not ready with the funding, we will wait for them and try not to retail that vehicle at that point in time.”
He also indicated that the company is witnessing a “month-end skew” during September and October due to a steel shortage. India’s largest utility vehicle maker is on course to increase the production of its SUVs from 39,000 units per month in FY23-end to around 49,000 units in FY24-end.
M&M stated that its quarterly volumes were the “highest ever” at 2,12,000 units, up 18 percent on a year-on-year (YoY) basis. Its SUV volumes have also increased twofold to around 114,742 units in the last quarter, up from 50,000 units per quarter in Q2 FY22.
“There is significant growth in SUV volumes as we have ramped up now ahead of the commitments that we have made. Likewise, you can see the gain in revenue market share that we have made. September had a 20.8 percent revenue market share,” Jejurikar further added.
Jejurikar also stated that the company has been the second-largest SUV maker for the last five quarters in a row and the number-one SUV maker in terms of revenues over the last many quarters. He revealed that the company’s revenue market share in the SUV segment got further enhanced by 90 basis points (bps) to 19.9 percent at the end of September.
“The gap in revenue market share in the second quarter (FY24) between us and the market leader (Maruti Suzuki) was about 0. 5 percent. As we ramp up our volumes, that gap will either narrow or disappear, as we have seen in the month of October. Since SUVs account for 60-65 percent of the passenger vehicle market, it's a competitive game. So, you're going to see your market share (going) up and down from month to month as we all compete together and grow the size of the (SUV) pie,” noted Jejurikar.
When asked about a probable timeline for regaining its market leadership in the SUV segment, he maintained, “We always said we want to stay number one (and) want to be number one in SUVs on revenue market share, and that will be our endeavour.”
Meanwhile, M&M reported a 66.9 percent growth in its standalone net profit at Rs 3,451.88 crore during the second quarter of this financial year. The sharp growth in profit came on the back of higher volumes as SUV despatches remained strong, fuelled by order book execution and improvements in the supply chain situation.
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