Pawan Goenka is not unduly concerned about competition in the utility-vehicle space where his company, Mahindra & Mahindra, is the market leader.
“The Duster and Ertiga have not taken sales away from us as we are still growing at 35 per cent,” said M&M’s President (Automotive and Farm Equipment Sectors).
While the Duster has been launched by former ally, Renault, the Ertiga comes from the Maruti-Suzuki stable. Ford’s EcoSport will join the parade later this year.
According to Goenka, while there are a whole lot of new entrants in UVs, this segment is also growing rapidly. “Customers are increasingly opting for UVs where penetration levels are low compared to cars. This promises good growth and, from our point of view, we are in the right place at the right time,” he said.
Consolidation
This quarter M&M will launch its mini-SUV and the Rexton from its recent Korean acquisition, SsangYong Motor. These products are expected to further consolidate its position in UVs.
Overall, the company’s automotive business has seen brisk growth with the NXR electric car adding to the list of ‘strategic launches’ this quarter.
“It finally boils down to the product and everything falls into place when it sells. We are in a pretty good situation right now,” Goenka said. While the industry grew by eight per cent this quarter, UVs and pickups (which are the core of M&M’s business) grew by 52 and 70 per cent respectively. “We are getting 50 per cent of our volumes from the UV segment and about 20 per cent from pickups, which are both booming,” he added.
Models such as the Bolero, Scorpio, XUV500 and the large pickup have been doing brisk business.
Further, the Verito (the rechristened Logan) has been clocking relatively good numbers in the entry-sedan segment.
“All these products have a strong pull in the market and we are pretty much selling what we make. We are getting into this quarter on a strong note,” Goenka said.
Capacity constraint
M&M is keeping its options open for a new plant.
Talks have been on with States, including Tamil Nadu, but no decision has been reached yet.
The company believes it will run out of capacity at Chakan by the end of next fiscal (FY ‘14) and can at best stretch it to the beginning of ’15.
“It takes time to set up a new plant and we need to take a decision immediately. Every day’s delay is a cause for concern,” Goenka said.