Indian SUV buyers planning to drive home a brand-new Mahindra vehicle during this festive season might have to shell out more money than expected. Mahindra & Mahindra is seriously considering another upward revision in the prices of its highly popular models, such as the Thar, Scorpio, and XUV 7XO. If the home-grown automaker decides to move forward with this price increase, it will be the fourth time within a single year that prices have been raised, dealing a blow to prospective festival buyers.
Escalating Input Costs and Pricing Strategy
In an interview, Nalinikanth Gollagunta, the CEO and President of Mahindra Automotive, revealed that the company has already implemented three price hikes this year, occurring in January, April, and July. The most recent price adjustment in July saw a hike of approximately 2.7% across their SUV lineup. Gollagunta mentioned that due to a recent rise in commodity and input costs, the management will evaluate the situation over the next couple of weeks to decide if another price adjustment is necessary to protect operational margins.
Tax Reductions and Market Demand
Interestingly, Gollagunta stated that the previous price hikes have not had any noticeable adverse impact on customer interest, inquiries, or vehicle bookings. He attributed this sustained demand to the fact that Mahindra's vehicles are still selling at prices lower than they were prior to the reduction in Goods and Services Tax (GST). Consequently, customer interest remains robust in the market. Looking ahead to the upcoming festive season, he expressed strong confidence that demand will remain highly elevated both for Mahindra and the wider automotive industry, fueled by the lower post-GST pricing and a refreshed product lineup.
Electrification Over Hybrids
When questioned about the company's stance on hybrid engine technology, Gollagunta emphasized that Mahindra's primary strategic focus remains firmly on electric vehicles (EVs). While the company is prepared to pivot its strategy if regulatory frameworks and government policies change in the future, electric mobility currently stands as its top priority and core development avenue.
Scaling Up Production and New Launches
Regarding manufacturing and production capacities, the company currently has the infrastructure to produce about 60,000 Internal Combustion Engine (ICE) vehicles and around 8,000 electric vehicles every month. However, there are aggressive expansion plans in motion. By the end of March or the beginning of April, Mahindra plans to scale up its ICE production capacity to 70,000 units per month, while boosting EV production capacity to 12,000 units per month. This will bring the company's total manufacturing capability to an impressive 84,000 units per month. Additionally, Gollagunta disclosed that the company will introduce several product updates and launch two completely new models over the next two quarters.
