Mahindra has 90,000 bookings for 5 UVs, chip shortage impacts production

by Ajit Dalvi 07 Aug 2021

Mahindra & Mahindra, which yesterday announced robust profit of Rs 856 crore for the first quarter (April-June 2021) of FY2022, has nearly 90,000 bookings for five products – the Thar, XUV300, Scorpio, Bolero and the Bolero Pikup. However, due to the global shortage of semiconductors, production has been impacted leading to substantial waiting periods.

M&M currently has a 10-month waiting period for the new Thar, which was launched on October 2 and is one of M&M’s recent success stories. The company currently has over 39,000 bookings for the Thar, accounting for around 44% of the total 90,000 bookings for five UVs. In early July, the company hiked Thar prices by around Rs 32,000-Rs 92,000, depending on the variant and translating to a 2-7 percent hike.

The XUV300, another popular SUV from the Mahindra portfolio, has over 10,000 bookings with a two-month waiting period. Launched in January 2019, the compact SUV is seeing sustained demand. In February 2021, M&M introduced a petrol-AMT option. While the company had been offering the automated manual transmission on the diesel trims of the model till then, the 1.2-litre, turbocharged petrol motor gets the same convenience in the W6, W8 and W8 (O) variants of the SUV.

Meanwhile, the Scorpio currently has over 6,000 bookings with a 45-day waiting period.  And the sturdy Bolero has over 4,000 bookings. On July 13, the company expanded the Bolero portfolio with the launch of the Bolero Neo at an introductory price of Rs 848,000 (ex-showroom, all India). In barely three weeks since launch, the Bolero Neo has garnered over 5,500 bookings.

The Bolero Pikup, thanks to the boom in e-commerce and demand for last-mile deliveries across the country, has seen over 30,000 bookings in the first quarter of FY2022.

Dealing with commodity price rises and chip shortage
The unabated rise in commodity prices has seen most vehicle OEMs including M&M hike vehicle prices due to rising input costs. In the 16 months between March 2020 to June 2021, there has been a substantial price rise in base metals – HR steel (by 77%) and copper (by 86%) – and of precious metals – platinium (by 47%) and rhodium (by 86%).  M&M is working to offset the commodity price rise by cost management and price increases.

In FY2021, M&M produced a total of 165,881 vehicles (-14%) and sold a total of 157,215 units (-16%) in the domestic market and exported 6,732 units. In Q1 FY2022 (April-June 2021), the company produced a total of 49,118 units and sold 43,202 units in India, along with export of 2,496 units.

With no end in sight to the automotive industry’s woes as regards the continuing shortage of semiconductors, it is likely production at M&M will continued to be impacted in the near future. In a statement yesterday, reflective of this situation, Rajesh Jejurikar, Executive Director, M&M, said, “Commodity inflation and semiconductor supply issues continue to be of concern.”

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