Interview: Veejay Nakra, President, Automotive Division, Mahindra & Mahindra Ltd
Certain variants of Mahindra models—XUV300, Thar and XUV700—have among the highest waiting periods in the industry, ranging from 6-9 months. Veejay Nakra, President, Automotive Division, Mahindra & Mahindra Ltd, attributes this to continued customer interest in these models. “In the XUV700, we continue to get about 9,000 bookings every month,” he says. In an interview with FE’s Vikram Chaudhary, he adds that even though the semiconductor shortage is behind us, it’ll take some time for production to meet demand. He adds that, on August 15, Mahindra will share its electrification strategy for passenger vehicles.
Mahindra is focusing a lot on SUVs. Does this imply you may not develop new sedans or hatchback cars?
We want to be true to our core, our legacy, and expand our core of making differentiated, adventure-ready, authentic SUVs. That’s the space we will focus on. In the passenger vehicle category, we will play as an SUV player. It’s a conscious, strategic call because that is our core.
But what exactly is an SUV? There is no official definition, as such, of an SUV. Some carmakers even call their crossover cars as SUVs.
Anyone who makes any vehicle with a slightly macho-looking design thinks it can pass off as an SUV. But we have attempted our own definition on what a core sport utility vehicle is.One, it must have a certain level of performance, and should offer the thrill of driving. For that, it should at least have a 1.5-litre engine, and if it’s 1.2-litre, it should be turbocharged.Two, an SUV needs to have a certain stance and a commanding seating position. For that, the tyre should have a diameter of about 660 mm. Also, the distance of the seat from the ground should be more than 660 mm, and the vehicle should have a high ground clearance of 180-mm-plus.This definition accounts for 70% of the Indian utility vehicle market.
What is Mahindra’s ranking within SUV makers in India?
There are two ways to cut data—by volume and by revenue. Best is not to look at data by volume but by revenue. We are number one in the country if you look at Q1FY23 SUV sales by revenue share.
While Mahindra is getting stronger on petrol, is it still the biggest diesel passenger vehicle company in India?
We are clear number one when it comes to diesel. But petrol as a part of our portfolio is becoming equally significant. If you look at the range of products we’ve launched in the last three years—starting from XUV300, XUV700, Thar and now Scorpio-N—we have equally good world-class range of petrol engines. Our M-Hawk is the diesel engine series, and the M-Stallion is the petrol engine series.In diesel, we offer 1.5-litre and 2.2-litre engines, and in petrol we offer 1.2-litre, 1.5-litre and 2.0-litre engines.
What is the diesel-to-petrol sales ratio in the models you sell with both fuel options?
Both in the XUV300 and in the XUV700, the diesel-petrol sales ratio is 50:50, and even in the Thar that is a true-blue SUV the sales share of petrol is 35%.Overall, in these three models, the petrol sales ratio is 40-45%.At the same time, almost 37% of utility vehicles sales are of diesel, and larger vehicle users prefer diesel because of driving usage and the higher torque the diesel engine offers.In our view, both fuels will continue to place a significant part in the SUV space.
Why do Mahindra models have long waiting periods? Some variants of the XUV700 and the Thar have waiting periods in excess of six months.
We really appreciate how customers, despite the long waiting period, prefer to book Mahindra SUVs. Any good SUV in the market today has a waiting period of 3-6 months.In the XUV300, the waiting period is 3-6 months and we have been able to iron out supply chain issues.In the Thar, we continue to get as many bookings per month as our capacity and our ability to produce it, and hence on some variants the waiting period is 6-9 months, but most variants have a waiting period of about six months.In the XUV700, we continue to get about 9,000 bookings every month and we aren’t able to produce as many units, but customers know the kind of value the XUV700 offers and are still booking this SUV.We are doing everything both to increase capacity as well as resolving supply chain issues, especially for the XUV700.
Is the semiconductor shortage behind us?
It continues, unfortunately, and it will be a challenge for the industry for 6-12 months. While automakers have tried to iron out the challenges, the demand for chips and integrated circuits has also been going up significantly. Everybody is launching vehicles with very high levels of computation, very high level of electronics and features, and all of that requires advanced chips. So it’s a fairly complex situation; consumers also prefer to buy high-end variants that use more chips.
Mahindra acquired the electric car company Reva over 10 years ago, but has launched only a couple of electric cars till now. Why?
You are looking at our electrification journey only from the lens of passenger vehicles, but we are equally strong in commercial vehicles. In a market like India, it’s the three-wheeler category that first adopts electrification. Cognisant of that fact, we focused on electric three-wheelers and today our Trio range is the market leader (we have over 70% share, and in the last quarter we sold the highest-ever number of electric three-wheelers).The electrification of personal four-wheeler mobility has just begun, and we are on time (on August 15, we will share our entire electrification strategy for passenger vehicles).
Why aren’t you focusing on strong hybrid vehicles, as some Japanese are?
India evolved from BS4 to BS6, by skipping BS5. Similarly, we can go from internal combustion engines (ICE) to electric, by skipping hybrids. We don’t need to follow the classical transition from ICE to hybrid to electric.
Is the focus on MPVs still there? Do you sell the Marazzo?
We’ve consciously made a choice to serve our XUV700, Thar and XUV300 customers, as a result of that we’ve not been able to focus on the Marazzo, but as we ramp up we will start building and selling back the Marazzo in the market. That product is not discontinued.