Home-grown auto major Mahindra & Mahindra (M&M) on Wednesday said it was restructuring its two-wheeler business, as the vertical was not giving the results that it had expected earlier.

The company has already given voluntary retirement scheme (VRS) to 250 employees as part of this rejig.

“Two-wheelers is certainly one vertical where we have not met our expectations. Last year, the response to our offerings was not what we were looking forward to. We are currently in the process of re-strategising our two-wheeler business and deciding what the way forward is,” Pawan Goenka, Executive Director, M&M, told reporters here.

He said the company will be able to make a formal announcement on how to proceed further on its two-wheeler business in the next couple of months.

Asked if M&M was also thinking of exiting the two-wheeler business, Goenka said: “It is very unlikely. What we have done is ‘right size’ our plant. We have given VRS to probably around 250 people.”

Sales of M&M’s two-wheelers had declined by 12.7 per cent at 1,33,355 units in last financial year. As per the Society of Indian Automobile Manufacturers (SIAM), the company sold 13,549 units in the April-May period, down 38.21 per cent, compared with 21,930 units in the year-ago period.

The company’s scooters business has fared better with models, such as Gusto, Rodeo and Duro, than motorcycles, such as the Mojo and Centuro models. Goenka said the company would focus on Mojo and the scooter model Gusto 125.

He said currently the company was working with Italian design firm Pininfarina, which it had acquired last year to develop a new vehicle, but refused to share any details.

Pininfarina is also helping M&M’s other products, including the compact SUV, TUV300.

Confirming the development of its new product with SsangYong's X100 platform, which is also based on SsangYong Tivoli (soon to be launched), Goenka said: “That will give us a mid-range crossover vehicle that we don’t have in our product offerings.” On safety and emission norms, he said preparations for the upgradation to BS VI emission norms from BS IV were on in full steam and a total of 30 models, including variants, have to be upgraded and homologated at a per unit cost of it ₹95,000.

Goenka said the company was also working on development of petrol engines and by 2020 all its mainstream models would have petrol options.

On the tractor business, Goenka said sales had grown owing to good monsoon and the industry was likely to clock around 5.5 lakh units in the year, around 10 per cent growth.

M&M expects to grow in ‘mid teens’ percentage.

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