Mahindra continues to have ‘problem’ of plenty: 226,000 bookings

Mahindra & Mahindra, which has reported a strong Q3 FY2024 performance, continues to have a ‘problem’ of plenty. The company has revealed that, as of February 1, 2024, it has around 226,000 open bookings for its SUVs comprising the flagship XUV700, Scorpio N and Scorpio Classic, Thar, Bolero and Bolero Neo, XUV300 and the all-electric XUV400. This number is reflective of the continued strong level of demand for the company’s SUVs.

The two Scorpios account for the maximum number of bookings – 101,000 units or 45% of total bookings – and are currently averaging 16,000 bookings per month. They are followed by the Thar (71,000 bookings), XUV700 (35,000 bookings), the two Boleros (10,000). The XUV300 and XUV400 together account for 8,800 bookings.

According to the company, it is witnessing average monthly bookings in the range of 50,000 units. Meanwhile, its SUV deliveries have increased to an average of 40,000 units a month, which is the result of the ramped-up production over the past couple of quarters.

The increased level of factory output has helped reduce the order backlog by 60,000 units, considering that in early November 2023, cumulative SUV bookings were around 286,000 units. 

According to the company, cancellations of bookings in the past three months  (November 2023 to January 2024) have risen to around 10% due to the year-end VIN change and typically higher in November-December. However, in January 2024, booking cancellations reduced to less than eight percent.

The company, which had a manufacturing capacity of 39,000 units a month in Q3 FY2024, has targeted a 25% increase by end-Q4 FY2024 to 49,000 units per month, enabling it to cater to the sustained customer demand for its SUVs. This will augment manufacturing capacity to nearly 600,000 units per annum.   

Mahindra & Mahindra has reported strong growth in the third quarter of the ongoing fiscal year. The standalone revenue in Q3 FY2024 at Rs 25,642 crore is up 16% YoY (Q3 FY2023: Rs 22,113crore) and profit at Rs 2,454 crore has soared by 61% (Q3 FY2023: Rs 1,528 crore)

Capitalising on the SUV boom
India, in line with global trends, is witnessing a surging wave of demand for SUVs, and Mahindra, whose product portfolio is packed with eight SUVs (Bolero, Bolero Neo, Scorpio, Scorpio N, Scorpio Classic, Thar, XUV300, XUV400 and XUV700), is making the most of the surging demand for this vehicle type. In January 2024, the Mumbai-based auto major sold a total of 43,068 SUVs, a strong 31% YoY increase (January 2023: 32,915 units).

M&M’s sales of 376,845 units in the first 10 months of FY2024 have already surpassed its FY2023's record 359,253 units, and headed for 450,000 units.

M&M’s cumulative sales for the first 10 months at 376,845 units are up 29% on year-ago sales of 292,773 units. The sales data table above also reveals the strong and sustained growth trajectory the SUV manufacturer has maintained through the ongoing FY2024. While the company has averaged monthly sales of 37,684 units, its best monthly performance came in festive October – 43,708 units and 35% YoY growth. January 2024’s sales are the company’s second-best monthly performance in the fiscal to date.

With two months left for FY2024 to come to an end, M&M’s sales of 376,845 units have already surpassed the SUV maker’s record sales of 359,253 units in FY2023. Given the cumulative 226,000 bookings it has for its SUVs, expect M&M to clock sales in the region of 450,000 units or more in FY2024.

ALSO READ: Mahindra expect to outpace India's SUV market for third straight year in FY2025