M&M to roll out three new vehicles in three years

Mahindra and Mahindra (M&M),  India’s biggest sports utility vehicle (SUV) maker, said it will launch three completely new products in the next three years to boost its position in the market.

“We have had two major launches in the last 18 months. Next 12 months will not see new launches but at least four refreshes of the existing products. We are working on three new products, which will hit the market from fiscal 2015. So next three years we have significant offerings,” said Pawan Goenka, president - automotive and farm equipment sectors for M&M.

Despite slowdown in the passenger vehicle segment, M&M has managed to drive volumes on account of strong SUV and diesel product portfolio. For the quarter ended December, the company sold 70,483 vehicles, with a growth of 36%, the company said in a statement announcing Q3 financial results.

The standalone net profit in October-December grew 26.3% year on year at `836.2 crore. “The growth in the profits despite the relentless increase in material costs is due to a good volume performance by automotive sector and tight control on expenses,” it said.

However, analysts said the company’s results were below expectations on account of a 100 bps drop in operating profit margins. “M&M results were below estimate, negative surprises were both on realisations and auto margins. Going forward, volume pick-up in tractors and UV would be the key to watch out for,” said Rikesh Parekh,VP-equities, Motilal Oswal Securities.

For the tractor business, M&M said it will launch a brand new tractor in the next fiscal.
Sales remained subdued in the December quarter as it sold 62,522 tractors as against 62,342 sold a year ago as its major markets, including Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka and Gujarat, faced delayed monsoon. The company is expecting the sales to revive from April. Meantime, it has received an approval for completing the transaction for buying stakes in the Mahindra-Navistar joint venture.

On sales outlook, the company said the policies announced by the government have started to boost confidence in the market. The passenger vehicle industry is expected to grow 9-11% next fiscal, it said.