Pace of bookings not expected to go down despite longer waiting periods: Mahindra & Mahindra

At a time when Mumbai-based automaker Mahindra and Mahindra (M&M) is seeing 20-22 months waiting periods for its key models like XUV700 and the newly-launched Scorpio-N, billionaire Anand Mahindra-led company on Friday said that it doesn’t expect it booking orders to slow down. “Semiconductor crisis is largely abated. Demand is what is driving the higher wait times now. Scorpio-N got 1 lakh bookings in 30 minutes. Wait times are largely been due to the demand and the capacity will take some time to ramp up. We’re not seeing any reduction in demand,” Anish Shah, Managing Director & CEO, M&M told reporters at post-results press conference.

M&M announced a 67 per cent rise in standalone net profit at Rs 1,430 crore for the quarter ended 30 June, 2022. The company had posted a profit of Rs 857 crore in the year-ago period. On sequential basis, M&M net profit rose 10.7 per cent from Rs 1,292 crore in the previous quarter (Q4FY22). During its quarter under review, the company witnessed highest-ever quarterly standalone revenue for auto and farm segments at Rs 18,995 crore. The company also added that it "continues to be No.1 in SUV revenue market share (17.1 per cent)."

Shah added that he aims to increase the production capacity of 6000 of Scorpio-N. “We’re hopeful that waiting periods won’t adversely affect our orders because of the experience we had with XUV700. We’ve had less than 10 per cent cancellations and we continue to get new booking higher than the rate of monthly sales which is 9-10,000 and more. And, right now, customers are booking knowing that there’s a waiting period for 22 months. We don’t expect the pace of booking orders will slow down,” he added.

Shah says that there aren’t too many XUV700 cancellations because of an overlap with Scorpio-N bookings. “Their target groups are very different. However, some customers of XUV700 could move to a different Mahindra model due to waiting periods and that’s fine from our standpoint,” he said.

Rajesh Jejurikar, Executive Director, Farm & Auto said that two quarters back, the SUV demand was 17,000 and now it has increased to 26,000. “That’s a reflection of the fact that our supply situation has improved. The good news is that customers want to keep booking even with a 22-month booking period and that shows we have a very strong value proposition. At the moment we’re producing very close to our capacities of key models. Will be going up soon since the semiconductor crisis by and large behind us,” he added.

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