Mahindra and Mahindra Ltd (M&M), India’s largest maker of utility vehicles, plans to launch at least eight models in the next 12 months, including variants of existing models.
The company intends to unveil a new sports utility vehicle (SUV) as well as variants of the utility vehicle Xylo and the small truck Maxximo, president of automotive and farm equipment Pawan Goenka said in a conference call with analysts.
All the models will roll out from M&M’s factories at Nashik and Chakan in Maharashtra. “It’s going to be one of the busiest years for us in terms of new product launches,” said Goenka.
The announcement follows the utility vehicle maker reporting a 40% jump in quarterly profits on 28 July, beating analyst estimates.
Ajay Sethia, analyst at Centrum Broking Pvt. Ltd, said the launches may not boost sales significantly unless they include a compact SUV. M&has M been planning such a launch, but did not speak about it on Thursday.
“The SUV, expected to be priced at Rs5.5 lakh, can lead to incremental volumes,” said Sethia.
Goenka said the demand for its models was robust, but the company was facing production worries as three key inputs—tyres, casting components and fuel injection systems used in diesel vehicles—were in short supply.
As a result, M&M had suffered a production loss of 7-8% in the June quarter. This included tractors, utility vehicles and smaller vehicles, whose combined sales rose 12% to 101,864 units.
The firm is now considering importing some of these parts, said Goenka, but the impact will only be visible by the third quarter of the fiscal.
M&M is also considering setting up a tractor manufacturing unit in Tamil Nadu. This will help the company compete with India’s second largest tractor maker, Tractors and Farm Equipment Ltd, or Tafe, which has a strong presence in the southern states.
Another analyst with a foreign brokerage said his firm is positive about M&M’s performance in the coming quarters, but he is sceptical if it can sustain the margins. “The margins can play a spoilsport for any auto company,” he said, requesting anonymity.
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