14 Nov 2024
M&M Light Commercial Vehicle Sales Surge Amid Positive Market Trends
Mumbai: After facing challenges in recent months, Mahindra & Mahindra (M&M) is seeing a positive turnaround in its light commercial vehicle (LCV) sales, with growth accelerating since October. Rajesh Jejurikar, M&M’s Executive Director and CEO of Auto and Farm Sectors, shared insights with analysts following the company’s second-quarter financial results, noting that LCV demand has rebounded, particularly in the wholesale produce sector.
Positive Shift in Pickup Demand Linked to Wholesale Market Growth
Jejurikar explained that pickups, a significant part of M&M's LCV lineup, are experiencing renewed demand, which is closely linked to increased arrivals at wholesale markets (mandis). October saw a 20% uptick in mandi arrivals, driven by improved conditions in the agricultural sector after recent disruptions from heavy rains. "We are, finally, seeing a positive turnaround," Jejurikar noted, emphasizing the impact of higher mandi activity on the pickup truck segment.
Boost from New Launch: The Veero Pickup
The momentum in LCVs is further supported by the introduction of M&M's Veero pickup model, which debuted in September. According to Jejurikar, the Veero is the first "car-like" commercial vehicle, offering a blend of performance and comfort. He expressed optimism about its market appeal, stating, "We believe we have a very good product."
LCV Market Growth Expected Amid Improved Conditions for Agriculture
The outlook for M&M’s LCV segment is brightening, driven by improved agricultural output and steady demand for fresh produce transportation. Recent weather challenges led to crop damage, affecting mandi arrivals and Light Commercial Vehicle demand. However, as these challenges lessen, Mahindra anticipates sustained growth for its LCV lineup in the coming months.
Electric Vehicle Transition and Potential Impact on ICE Models
M&M is also preparing for a larger electric vehicle (EV) presence, with the first phase of EV capacity adding 10,000 units. Although some ICE models may face competition from upcoming EVs, Jejurikar expects minimal impact on core models such as the 3XO and Thar. He emphasized the need for a gradual approach, with plans to strengthen ICE manufacturing alongside EV production.
Focus on Long-Term Growth and Profitability
Jejurikar concluded by emphasizing M&M’s commitment to long-term growth. He acknowledged that price and production decisions are carefully made to balance growth and profitability. "We believe that we had to take a call to get the price right so that we kept growth going," he said, highlighting the importance of sustained growth in maintaining profit margins.
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