Mahindra & Mahindra (M&M) on Tuesday announced the prices of the top-end version of the soon-to-be launched BE 6 (Rs 26.9 lakh) and XEV 9e (Rs 30.5 lakh). Booking of both the models will open on February 14 and deliveries are slated for early March. Rajesh Jejurikar, executive director, M&M also told Swaraj Baggonkar that M&M is totally constrained on capacity for Thar Roxx and XUV3XO. Excerpts:
At what capacity will you start the production of the two cars?
The capacity for both the cars is 90,000 per annum. What we have shared today (5,000 per month) we think is the right pace at which we would like to ramp up in a way we stabilise quality, customer experience and stabilise service capability at dealerships. We will man the production lines to pace we are ramping up but the investment for infrastructure has happened for a higher level of capacity. We have to test the supplier capacity as well along with quality.
What kind of variant mix do you expect for both models?
This is the hardest thing to predict. We look for different inputs and one of them is the ‘add to cart’ feature which we started a few years back. This is the first time we are launching two products at the same time. We decided to go for the highest variants, backed by a simple and affordable finance option.
The components that have gone into making the EVs are more expensive than the ICE models. How will this impact your margins?
The percentage margins on the EVs are going to be lesser than the ICE because the GST rates are different. We will start calling out our EV margin and ICE margin separately. EV margins will be dramatically different for the same unit margin. Over a period of time we would expect the unit margin for these products to be similar to the ICE margins.
M&M is outpacing the growth logged by the rest of the industry and at that pace you will run out of capacity pretty soon.
We are working on capacity on some of our products. We are totally constrained on capacity for Thar Roxx and XUV3XO. We have some plans to increase that over the next 6-8 months but I fear that won’t be enough to solve the waiting period issue.
Are there plans for fresh investments for new capacity?
At some stage we will do it. We have not put a timeline to it.
What happened to the electric Thar that you showcased last year?
It will be launched with other EV vehicles. It is not a concept which will not get executed. We will talk about when we talk about the rest of the portfolio. But it is something we will do.
Have we explored the possibility of bringing these EVs in the ICE version?
It is not that easy to bring it in ICE.
Why was there a reduction in the investment by British International Investment in the EV company??
We did not need more than that, just a balancing gap. It was a mutual decision.
The chip design scheme has not seen progress on the lines the government had expected. Any changes expected in the same?
We are trying to make some changes to the scheme in order to make it more attractive and easier for startups to use. We are also expanding the eligibility criteria.