Mahindra & Mahindra Ltd has reduced the breakeven point for its truck and business division, positioning it for improved profitability as sales volumes increase, marking a significant turnaround in the unit.
Anish Shah, MD of Mahindra & Mahindra, stated that while the truck and bus business has turned around well, the company can do a lot more, hopefully giving much stronger competition to some of the incumbent players. "We are still small, so we'll have to take some time to be able to get there," Shah remarked, explaining that this division includes defense armored vehicles among other things.
"There's a good synergy between that and our defense manufacturing also," continued the top executive, highlighting that in order to capitalise on the opportunities, the company recently put those businesses under the same leadership. "We see this as one that we can grow. It had been one in what we had put back there in category 'A' in terms of businesses. We feel that it will grow and do well. And it's one that I think is on a solid path now," Shah further added.
Rajesh Jejurikar, ED – auto and farm business at Mahindra & Mahindra, in a recent earnings call said, "So, there's a very calibrated execution plan on how to ramp this up" " we are not in a hurry," he noted.
Elaborating further on the expansion plans, Jejurikar said that they currently remain focused on nearly 40–50 key towns or key dealerships. In terms of market share metrics, out of the 40 dealers, around 12 of them have a market share of more than 10%. "We are basically building share, town by town at a time instead of kind of saying, okay, go across the country, of course, there are dealers. It's not like we don't have dealers in other towns, but management focus is going into very, very focused execution on the ground, picking dealers step by step, building positivity amongst the rest of the dealers by demonstrating success."
The Mahindra Truck and Bus division caters to 5 tonne to 55 tonne GVW, with variants that meet the varying needs of cargo and specialised load applications. The range of medium and heavy commercial vehicles is being manufactured at the new green field plant at Chakan. The plant, which spans over 700 acres, has been set up with an investment of over Rs 4000 crore and is producing other Mahindra products as well.