Mahindra & Mahindra (M&M) has projected high growth, especially in its SUV segment, and is reportedly well ahead of industry averages with an estimated 15-19% growth in SUV sales compared to the expected sub-5% industry growth rate. In this analysis, we analyze critical drivers of growth for M&M, key performance highlights, and promising moves in the electric vehicle space.
Performance Overview of Mahindra XUV400 EV
To better understand the performance of Mahindra in the EV segment, let’s take a look at the month-wise domestic sales volumes of the XUV400 EV for the recent months of 2024.
| Month | Domestic Volumes (in units) |
|---|---|
| April ’24 | 329 |
| May ’24 | 192 |
| June ’24 | 200 |
| July ’24 | 269 |
| August ’24 | 713 |
| September ’24 | 862 |
That is a straight upward trend over the last two months, especially August and September. It shows that people are demanding Mahindra electric SUVs, and the company has been gaining more ground in the EV segment.
Strong SUV Sales Projections and Market Performance
The company has also touted an ambitious growth prognosis for the SUV segment, expecting “mid to high teens” growth for FY25. This seems quite high compared with the 3-5% industry-wide outlook. The SUV portfolio of the brand, comprising big models like Scorpio and Thar, is upscaling, helped by an equally high demand across various customer segments.
This success is underlined by M&M Executive Director for the Farm Equipment and Automotive sectors, Rajesh Jejurikar. Here, inventory levels have now stabilised at below 30 days. This proactive inventory management with consumption going strong is in M&M’s favour to meet its growth targets.
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SUV Revenue Surge and Market Share Expansion
M&M’s net revenue per SUV rose by 9-10% in Q2 FY25 sequentially over the same quarter last year. The company witnessed an uptick of 18% in the volumes of SUV and the market share of its revenue lifted to 21.9%, thereby increasing significantly by 190 basis points. This enhancement reflects the strong positioning of M&M’s in competitive SUV space and has made the brand more efficient in delivering durable, performance-based vehicles suitable for consumer appreciation.
Capacity Expansion and Production Adjustments
As of now, M&M has a monthly capacity for the production of SUVs at 54,000 units, which reflects an increase of 10% from FY24. Company would be looking at further capacity additions for ICE vehicles in the immediate future that is led by market demand in overseas markets especially South Africa. There are no plans in the near term to add significantly to ICE capacity, but instead step up production for the Thar Roxx model, a 5-door SUV introduced in August. This has gained huge consumer favorites as it has been built up for 9-15 months after sales of the original 3-door Thar declined and M&M has sold out from it.
Leadership in Light Commercial Vehicles and Tractors
Apart from SUVs, M&M retains top position in light commercial vehicle (LCV) segment and has a massive 52.3 percent of market share in the under 3.5 ton LCV category. Staring at a very good show in H2, M&M has revised the tractor sales estimate for FY25 from 5% to 6-6.5%. The revision follows better prospects of agricultural growth and M&M’s sustained leadership in the tractor market-a clear message that it is now well and truly the market leader in this space as well.
Impressive Financial Performance: Boost in Net Profit and Revenue
The firm has witnessed the strongest performance strength from its automotive and tractor, which has driven its consolidated net profit in Q2 FY25-high point: 35% year-on-year jump to INR 3,171 crore versus Q2 FY24, while revenue from operation saw a 10% YoY increase and stood at INR 37,924 crore.
Electric Vehicle Strategy: Embracing Innovation with New Models
Mahindra has embraced an ambitious EV strategy focused on developing new electric SUVs under its INGLO platform, with the XEV 9e and BE 6e set for launch in November in Chennai. Unlike the traditional XUV400 model, these new “born-electric” SUVs are designed specifically for electric performance. With EV penetration in India at just around 2% for passenger vehicles, M&M sees tremendous growth potential as the country moves towards higher EV adoption rates.
Jejurikar emphasized that quality products tailored to the Indian market can significantly accelerate EV adoption. M&M has dedicated a monthly production capacity of 10,000 units for these new electric models, with a separate assembly line at its Chakan plant, which is expected to be fully operational by March. While M&M remains focused on EVs, it has not ruled out hybrid technology if market demand shifts in that direction, though hybrids are not a current priority.
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Current EV Performance and Strategy for XUV400
The only electric vehicle that the M&M’s portfolio currently boasts of is the XUV400, which has seen moderately decent sales selling at around 600 units per month in Q2. The model still does have an existing niche client base that appreciates it, but definitely, it is not something the company is heavily emphasizing. Not treading too much seriousness in marketing muscles behind XUV400, the M&M has chosen to push its new electric-origin SUVs forward. According to Jejurikar, M&M’s agenda is strictly to focus on widening its series of EVs with quality products, and it confidently believes this will help it connect well with its customers.
Mahindra & Mahindra Strategic Partnership with Volkswagen for EV Component Supply
Earlier in the year, M&M announced a pact with Volkswagen to use components of Volkswagen’s MEB platform-a modular electric vehicle toolkit. This will help M&M work toward building two-pronged goals of EVs for markets in India and international markets. It is an opportunistic thing both by these automobile majors, positioning themselves ahead of the curve that the world would shift towards electrification while scaling up their EV portfolios.
Jejurikar further said that M&M still has the door wide open for probing more partnership opportunities in different business sectors. Therefore, potential avenues for further collaboration will emerge as the company builds a strong foothold in the emerging EV market.
Conclusion
M&M’s FY25 prospects seem indeed far more positive, given the company is witnessing strong growth in both SUV and tractor segments, strategic capacity maneuvers, and a forward approach to the electric vehicle space. With two new electric SUVs planned, better production capacity, and a strategic partnership with Volkswagen, M&M is excellently poised to ride the Indian EV wave.
The strategic plan by the company to further enhance its product offerings while working on its inventory optimization as well as investing in future-forward technologies really speaks to commitment to retaining market leadership. M&M will position itself not only as a leading player in ICE but also in EV markets as the automotive industry continues to evolve. This synergy of great traditional vehicle performance with revolutionary moves in electrification is likely to maintain M&M in a slightly ahead position of all its competitors and help boost the growth prospects for the foreseeable future.
