India’s Mahindra & Mahindra stated on Friday that the production capacity of its sport-mileage vehicles( SUVs) is lower than the demand. People are rushing to buy the vehicles, boosting the automaker’s profits. There is a sharp jump in first-quarter net profit. Sales of the company’s vehicles soared to 149,803 units. It is 74% more than compared last year.
Furthermore, the open bookings were for more than 273,000 vehicles. “We have kicked off capacity expansion programs but had not anticipated this kind of demand,” Rajesh Jejurikar, executive director at the Mumbai-headquartered company said. He further said, “We are ramping up capacity to make sure we can leverage all the demand we have.” He declined to give further detail on how much capacity the company is adding. Mahindra said it received more than 100,000 orders within 30 minutes of opening books for its Scorpio-N SUV, worth around 180 billion rupees ($2.3 billion) in sales value. It currently has the capacity to produce around 6,000 of these vehicles a month, Jejurikar said.
While demand for cars has been strong, Indian automakers, including Mahindra, say they are also seeing an easing of the semiconductor shortages which have hampered the industry since the pandemic. Mahindra was hit hard by a chip shortage, curbing supplies of its vehicles last year.
Jejurikar said the company sources chips from multiple locations and there are no early signals of supply disruption due to the geopolitical situation in Taiwan. The company reported a consolidated net profit of 21.96 billion rupees for the three months ended June 30, up from 4.24 billion a year earlier. Revenue from operations rose 48% during the quarter to 284.12 billion rupees.
“M&M continues to maintain the first position in SUV revenue market share, while FES strengthened its leadership position with 42.7 percent tractor market share. With 2,73,000 bookings, the demand for the automotive product portfolio remains strong. Following the blockbuster launch of Scorpio-N, we are excited about the next phase with the unveiling of our Born Electric Vision later this month,” Jejurikar said. The automakers in India are going big for their electrification. The latest teaser reveals that the upcoming range of Born Electric vehicles gets completely new infotainment graphics. This is different from the current AdrenoX system used in the XUV700 and Scorpio N as the layout is a lot more minimalistic here. While Mahindra has given a glimpse of these upcoming Born Electric vehicles before, this latest teaser shows one of the five SUVs in a little more detail.