M&M hopes demand will increase in December quarter

Mahindra & Mahindra (M&M) is planning to launch five more vehicles in the automotive segment in the current financial year, as it expects industry sales to pick up during October-December, a top company official said on Wednesday. The country's largest utility vehicles maker is also looking to grow its presence in the five-16 tn category truck segment.

M&M plans to invest Rs 300 crore in developing new products in the nine-16-tonne category, and Rs 200 crore to improve existing products in the five-seven-tonne category, said Pawan Goenka, executive director at M&M.

The company has envisaged capital expenditure of Rs 2,500 crore in the current financial year, he said. The investment in the heavy commercial vehicle segment is in line with Mahindra & Mahindra's strategy of doubling its market share in the segment to five-six per cent over the next two-three years, he said.

"The new truck in the nine-16-tonne category should be ready in two and a half years and will help us enter into the space where we are not present at the moment. Besides, we would also upgrade our existing product in the five-seven category. All these should help us reach our aim to double our market share in the heavy commercial vehicles space in two-to-three years," Goenka said. Apart from heavy commercial vehicles, M&M also sells tractors, passenger vehicles, and two-wheelers.

The host of new product launches are expected to increase and consolidate M&M's market share in the passenger vehicle segment, he said. Within the passenger vehicle space, M&M enjoys a dominant status in utility vehicle, small commercial vehicle and pick-up segments, with market share of 35-36 per cent, 30 per cent and 70 per cent, respectively. "Our aim is to grow our utility vehicle segment, which includes brands like Scorpio, Balero among others, to around 40 per cent in the next one year.  Whereas, in pick ups and SCVs (small commercial vehicles), we would like to further strengthen our position in the market," he said.

Goenka expects the passenger vehicle segment in the country to grow by five-six per cent in the October-March period, but expects the tractor sales to remain sluggish in the same period due to deficient monsoon.

"All the current economic indicators are positive except the deficient monsson, which would impact the growth in agriculture segment. The passenger vehicles will continue to do well and grow by five-six per cent in October-March. But tractor sales, which has de-grown by 20 per cent since April, will remain sluggish, due to bad monsoon," he said.

The company is also planning to set up a spare parts distribution centre for the eastern region at Kharagpur near Kolkata. The Kharagpur facility would entail an investment of Rs 150 crore and service Odisha, Jharkhand, Bihar and the Northeast region, he said.

Electric Cars
Mahindra is looking to ramp up its electric car portfolio as it plans to start exports to Europe from June next year, Goenka said.The company has already two-door electric car named e2o and is developing a four-door variant, which is expected to be ready for launch by June 2016, he said.

"Sales of electric cars are picking up. We have sold 100 cars in September. We are starting a distribution office in the UK, as we would start exporting electric cars to Europe from June next year," he said.