Commodity price hike hit company, unable to fully pass on to consumers: M&M

Firm will move first to alternative fuels before migrating to EVs, says top company exec

With diesel prices having risen 90 per cent since the pandemic broke out in April 2020, Mahindra & Mahindra’s Truck and Bus Division (MTB) said on Monday that the rise in commodity prices has affected the company and it was unable to pass the spike on completely to consumers.

A senior company executive said the increase in commodity prices was too great for any player to pass on to customers. "We are looking at it on a quarterly basis. We could not pass on this completely, only a significant portion was passed on to the customers," said Veejay Nakra, Chief Executive Officer, Automotive Sector, Mahindra & Mahindra.  

Commodity prices like that of steel reportedly increased from Rs 38 per kilo gram in April 2020 to around Rs 77 per kg during the third quarter of the current fiscal. Other commodities like copper, aluminium, coking coal and rhodium too saw a considerable rise.  

Regarding the shift towards electric vehicles, he said that the first transition will happen in favour of alternate fuels in the commercial vehichle segment. "When it comes to EVs, the shift will happen when it is economical for the customer. We are going to make sure that we will be in all segments. Clearly, alternate fuels like CNG is going to play well before the electric play," he said.

The company on Monday came out with a “Get More Mileage or Give Truck Back” guarantee scheme for all its BS VI vehicles-- including Blazo X Heavy, Furio Intermediate, and Light Commercial trucks including Furio7 and Jayo.  "The new range features the proven 7.2L mPower Engine (HCVs) and mDi Tech Engine (ILCV) with FuelSmart Technology, Mild EGR with proven Bosch After Treatment System that leads to lower Ad Blue Consumption and many other technological advancements, besides the cutting-edge iMAXX Telematics solution, all of which together, ensure guaranteed higher mileage," the company said in a statement.  

It claims that this competitive advantage will provide them an edge in the business as fuel contributes to around 60 per cent of the operating cost of the transport companies.

"The Mileage Guarantee, ‘Get More Mileage or Give the Truck Back’ was first offered on our HCV truck Blazo in 2016 and not a single truck has come back. All our new introductions ever since, Blazo X, Furio  ICV range and Furio 7 have delivered higher fuel efficiency, which is the outcome of Mahindra’s superior technological prowess rooted into a deep understanding of the Indian customer," said Jalaj Gupta, Business Head, Commercial Vehicles Business Unit, Mahindra & Mahindra.

He added that MTB is offering service guarantee to ensure higher uptime for our customers through guaranteed speedier turnaround of the truck, be it on the highway or at the dealership workshop. "The state-of-the-are iMAXX Telematics technology is further helping lower the Cost of Ownership by providing a firm control to the transporter over his trucks, remotely. All this and the guaranteed higher mileage would eventually translate into higher prosperity of our customers,” he said.