M&M to launch two new platforms

Mahindra & Mahindra is developing two new vehicle platforms, president (automotive sector), Pawan Goenka told reporters at the company’s press conference announcing its full-year results. The vehicles will follow the 2008 launch of the Ingenio sport utility vehicle.

The first platform will be a mass-market passenger car and cargo vehicle, which will be M&M’s maiden offering from its new Pune plant. An upmarket SUV to be produced in Chennai will then follow after these two variants have hit the market.

“The Ingenio platform will be rolled out from our plant in Nashik, and it is on track. We are also working on a new upmarket sport utility vehicle, and are already more than halfway through for a mass-market platform for a passenger as well as a cargo carrier,” Goenka said.

Without giving away the timeframe, Goenka said that a typical vehicle platform takes three to five years to develop. He also added it was difficult to put an overall ballpark investment figure, saying typically the company would spend about Rs 500-600 crore on each new platform.

Coming to the company’s sales, M&M sold 1,27,856 utility vehicles in fiscal year 2007, an increase of 11 percent over the year before against the industry’s growth of 14 percent. Tractors again performed well where sales went up 21.2 percent to 318,317 vehicles. On exports, M&M launched the Scorpio pickup in South Africa last year. This along with shipments to Europe, Middle East, South America and Southeast Asia helped raise UV exports by 45 percent. The company also exported 7,525 tractors for a growth of eight percent over last year.

“The appreciation of the Indian rupee has affected our export realization. And therefore, we will have to work harder to maintain our export margins,” said Anand Mahindra, vice chairman and managing director.

On a standalone basis, M&M reported a net income of Rs 2,747 crore for the January-March 2007 period, up 20 percent from the year-ago period, although net profit dipped 26 percent to Rs 236 crore. “Fourth quarter net profit appears to be lower because last year we had some income from exceptional items like a stake sale in Mahindra Finance etc. On a like-to-like basis, the net profit is up 36 percent,” explained Mahindra.

With a strong performance from its subsidiaries, consolidated revenue increased 41 percent to Rs 5,882 crore for the quarter. Consolidated profit, net of exceptional items, prior-period adjustment and tax and minority interests, was Rs 166.2 crore versus
Rs 599 crore in the same quarter last year.