M&M plans mega stable expansion

Auto companies may not be having the best of times when it comes to sales, but that is not deterring them from new launches, refreshes, and variants.

Homegrown auto major Mahindra & Mahindra has stuck to its launch plans and is eyeing three new launches in the next fiscal (FY16), president of the Automotive & Farm Equipment Sectors, Pawan Goenka, told analysts.

“The company is planning new model launches, including two compact utility vehicles (UVs) and one small commercial vehicle — one each in Q1, Q2 and Q3 of FY16,” Goenka told analysts.

The company is also planning three refreshes and three new variants of existing products by the third quarter of the next fiscal, Goenka said, adding that new compact UVs should enable the company to recover some of the market share that it has lost.
Petrol push to stay

Goenka also indicated that the preference by buyers towards petrol variants will continue. “The company expects a gap between petrol and diesel prices to narrow further due to which customers in compact UV segment will prefer petrol one as compared with diesel variants,” he said.

The existing models in the UV space, including Bolero, Scorpio, and XUV, are likely to have flat or marginal growth in the next fiscal, Goenka told analysts, adding that the new products are likely to have a higher breakeven point due to investments.

As far as tractor volumes are concerned, the company indicated that an uptick is likely in the second half of the next fiscal. “FY16 tractor volumes are likely to be at 5-7 per cent as compared with a decline of 13 per cent in FY15,” Goenka said.

A recovery in tractor sales is likely in H2 of FY16 driven by normal monsoon and an increase of tractor usage in non farm usage, Goenka said, adding that two weak monsoons back to back could push back the expected recovery in tractor volumes by another year.