Our cancellation rate of 8% despite longer waiting periods in not surprising at all: M&M’s Rajesh Jejurikar

Mahindra and Mahindra (M&M)’s XUV700 has been the automaker’s top-selling model since its launch in 2021, so much so that until a few weeks back, its waiting period stretched up to 13 months for some models. But with production expected to ramp up from 6,000 to 10,000 units from March 2024, waiting periods could drop by 3-4 months. M&M has been gradually ramping up its production capacity to meet the growing demand. Although, Rajesh Jejurikar, M&M’s Executive Director and CEO (Auto and Farm sector), is not happy about the cancellation rate of around 8 per cent, he says that it’s not surprising given the demand and waiting periods.

“We’re not happy about it, but if we’re getting 8 per cent cancellation rate despite our waiting period being 8-10 months, I think it’s not unexpected at all. It shows that despite knowing the waiting periods, people are booking. A year-and-a-half back, when you look back at the overall industry, most had long waiting periods. Today most others don’t. So, customers do have a choice of moving to something that is available right now. We think 8% is a reasonable cancellation rate for now,” Jejurikar told Business Today. “We are very keen to bring down our waiting periods,” he adds.

He says supply-side issues have improved quite a lot. “Now we are ready for SUVs with a capacity of [producing] 39,000 [units] a month—earlier we were doing 34,000-35,000.  We would expect 10-15% of shortages due to specific supply situation of semiconductors. Our expectation is 8-10% of our capacity would get impacted by supply chain shortages from time to time. By the end of this year, we would have moved SUV capacity to around 49,000. So we were at a very good rate of capacity,” he adds.

The company, he said, is trying its best to further bring down waiting periods. “We don’t like the fact that we have this kind of waiting periods. It’s not customer centric. It’s nice to have hype when you launch, but customers are very unhappy with having to wait so long,” he says.

Today, despite the price point, M&M is second in terms of volumes in the SUV segment and first in terms of revenue market share. “One difference as compared to many other manufacturers (when it comes to semiconductor issues) is that our products today have many more chips. Just between a Bolero and XUV700, Bolero has less than 50 chips, while higher-end XUV700 version has more than 150 chips. So, the probability of something running short in a vehicle with so many chips is much higher,” he said.

He added that all the new product launches, especially EVs, are all on track.