M&M to announce the next phase of investment in March, ramp up output further

Sitting on 2.86 lakh units of order book and with the new launches planned for 2024, Mahindra & Mahindra is looking at ramping up capacity beyond 49,000 units a month, and it aims to reach this target by March 2024.  

The new capacity addition plan will be announced within the next 3-6 months, as the company prepares a blueprint for its new mid-term plan from FY25 to FY27, which will call for significant investment on the electric vehicle front too. 

Speaking to analysts earlier in November, Rajesh Jejurikar, Executive Director, Mahindra & Mahindra, said that the quantum of investment in the next three-year cycle and the exact increase in capacity will be shared in the due course. 

"The 49,000 units per month capacity that we put out is till March, it does not cover the capacity that will be coming up in FY25. There will be new capacity that will come, as we bring in the Thar five-door, and subsequently for EVs, it will be higher than this. We will share the fresh capacity addition plan as we touch 49,000 units by March 2024. We will have a reasonably fresh capacity increase, there may be some EV to ICE cannibalisation, but we will have enough fungible capacity," added Jejurikar. 

Over the next 12 months, Mahindra is likely to introduce an updated version of the XUV 400, a facelifted XUV 300, and the Five door Thar, which may call for a higher output, given the sustained booking momentum, despite higher output. The booking numbers continue to outpace the deliveries that the company has been able achieve in recent months. 

While the company did not share the specific quantum of capacity increase, the monthly production plan may further increase by a minimum of 10 percent in the next financial year to about 55,000 units a month.  

The company has more than doubled its output in the last few years to cater to the strong order offtake for its new range of SUVs - Thar, XUV 700 and Scorpio in the marketplace. M&M had committed an investment of close to Rs 10,000 crore in the last three-year cycle from FY21 to FY24.  

What's more, Mahindra & Mahindra continues to sustain a strong demand momentum for its brand and has been garnering an average of 51,000 units booking every month over the last few months.

As of 1 November 2023, Mahindra had an open booking of 10,000 units of XUV300 and XUV 400, 70,000 units of XUV 700, 76,000 units of Thar, 11,000 units of Bolero, and 1,19,000 bookings of Scorpio N, including the Classic.

The company's average billing has been to the tune of 38,000 units with the ramp-up in production for all its key models XUV 700, Thar, and Scorpio.

Jejurikar stated that the company is keen on delivering more cars in the future and will look to bring down the waiting period.

From July to September of 2023, Mahindra & Mahindra sold 1,14,742 SUVs - which is more than double the volume it used to do a couple of years ago. The company has been the number 2 SUV maker in terms of volumes for 5 quarters in a row and the number 1 SUV maker in terms of revenues for four out of the last five quarters.