 "Mahindra and Mahindra")
Auto major Mahindra & Mahindra’s (M&M’s) open bookings have steadily risen every quarter over the past year, even as the company is working on expanding its manufacturing capacity. From 140,000 outstanding bookings in the first quarter of last financial year, M&M’s open bookings stood at 292,000 units (as on May 1, 2023).
The Scorpio-N has the most outstanding bookings, at 117,000 units. The company noted in a recent investor presentation it has been getting around 57,000 fresh bookings every month. While M&M is receiving around 14,000 bookings each month for the Scorpio-N and the Thar, 10,000 orders are being made for the XUV300 and the XUV400 each. However, 7-8 per cent bookings are being cancelled, too, each month.
As against 57,000 bookings a month, M&M is doing 33,000 billings.
In the fourth quarter (2022-23) analyst meeting, Rajesh Jejurikar, executive director and CEO, auto and farm segment, M&M, said the company lost out on 10,000 units (mainly XUV700 and Scorpio-N) in the quarter because of semiconductor supply issues. If it had not been for semiconductor shortages (a 10-12 per cent shortfall), the company would have produced 39,000 utility vehicles a month at full capacity, he said.
“Capacity for 49,000 UVs (a month) should be ready by January-February 2024, if not earlier… As part of that, (capacity for) Scorpio N and XUV 700 will be in the region of 10,000 units a month each,” he said, adding that M&M is also building capacity for the Thar, whose five-door version is in the works.
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Maruti Suzuki India has recently launched Thar’s competition – the five-door off-roader SUV Jimny.
M&M increased its SUV capacity from 29,000 units per month to 39,000 units per month in FY23. A spokesperson said the company achieved the capacity expansion target for last financial year by December 2022, ahead of the March 2023 deadline.
Nirmal Bang analysts recently noted: “Cancellations stood at less than 8 per cent in Q4FY23. For the auto segment, we are building in around 12 percent volume CAGR over FY23-FY25, led by new capacity addition and a strong order book.”
Manish Raj Singhania, president, the Federation of Automobile Dealers Associations (FADA), told Business Standard that it is a contrasting story when it comes to retail demand for cars -- at one end, some cars have a waiting period running into months, and the other, some cars are not moving out fast, adding to inventory at dealerships.
In fact, as of May, the inventory levels at car dealerships inched up to 40-45 days from 37-39 days in March.
