Mahindra Scorpio Z101 will be unveiled by Q4FY22: Veejay Nakra, CEO, Automotive Division

Veejay Nakra, CEO - Automotive Division, Mahindra & Mahindra Ltd, talks about the response for XUV700, semi-conductor shortage issue, launches and company’s strategy to strengthen the SUV portfolio among others during an exclusive chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: You recently unveiled Mahindra XUV700, which is a fantastic product by the company. What kind of response you are expecting in terms of sales?

A: As you said, the response is very encouraging. I would like to share a data point with you that in the last one-and-a-half to two months, we have put a lot of digital content about this product on digital channels, whether it is on YouTube or other digital assets. We term it as snackable content because they are contents of 20 to 30 seconds and if I will add all those then we have received 200 million views to our digital assets. So, the response is good and as we said, the market is waiting for us to ultimately open bookings and launch the product. Preparations for the same is going well and very soon we will announce it. 

See Zee Business Live TV Streaming Below:

Q: Every auto company is facing the problem of semi-conductor shortage. How will you deal with it and how big a worry it is going to be for you as you are expecting a huge demand for the same?

A: As you rightly said, the issue of semi-conductor is a global industry challenge, and we are trying our best to not lose the opportunity. We knew that by when our production schedule will start, when we would like to launch the product, so, we are prepared a bit for it. But the challenge will remain in terms of consistency of supply of semiconductors, which is a difficult question right now and it is hard to provide a clear reply for it. There is a need to understand two to three things. The demand for semi-conductor, especially due to lockdown, work from home, has increased a lot in different industries - except the automotive industry – like electronic goods, laptops and mobile phones. When the pandemic started, the automobile companies were looking at the prices of their products, I am talking in global terms. The kind of demand forecast they did, led to the shifting of the capacities for these other industries. Now as the demand is coming back in a very-very strong manner, capacity redistribution is a challenge and as a result that there is a huge demand, and the automobile companies are not being able to fulfil that. So, I think this challenge will be there in place and I feel it is not a two to three months, short-term issue. This is something that the industry will continue to see for some time. Demand is strong not only for XUV 700 but also for all of our products. If I will have a look at the July data, although, we are on the last day of August and if I will have a look at the bookings that we have received this month then the good thing is that despite the second wave of COVID, which stuck India in every part, maybe it is rural or urban, the demand is very-very strong, and the booking pipeline is very strong. 

Q: As you said, the semi-conductor issue is not a short-term problem but a long-term problem for the entire industry. So, what will be Mahindra & Mahindra’s strategy to deal with it as we are moving out of the COVID, and it is time to make up the volume loss? How you are going to work to ensure that the problem does not hamper your business a lot, i.e., what will be your strategy to mitigate that impact?

A: Not only us but the entire automobile industry is searching for an alternate solution and are also working on it. Not on Mahindra but the entire automobile industry is approaching all the available options like different markets, alternate sources, open market, OE buying. One is the sourcing part and I have said that alternate sources, alternate countries, alternate suppliers, and alternate markets are being looked upon. You would have also seen that not only Mahindra, but even other automobile companies are also looking forward that how do we ensure that our variant strategy of the products – there are variants in the product portfolio where semi-conductor usage is low – proposition more attractive for our customers so that they consider buying those. And we have also seen that the customers who are in a need to buy a vehicle are open to looking at other variants besides looking at the top-end variants. So, I think, we are addressing it, by all means, maybe it is a variant mix of sourcing strategy, all options are on the table, and we are working on all of these. 

Q: What's your product launch pipeline for the next 12 months or by the end of FY22 across the segments? Also, do you have any plans to enter into electric vehicles after what you have already put out as many manufacturers are coming into the space and continuous launches are being made?

A: In the last 12 months, August last year to August this year, despite all the supply chain challenges and semi-conductor issues, we have launched Thar, which has been a very successful product and launch; we also launched Bolero Neo, earlier this year in the month of May & June, it is also well received in India. Bolero, which used to be a very strong rural brand and Bolero Neo is a very-very different Avtaar of Bolero and both will co-exist in the market. Its acceptability, even in the urban market has been very strong. Now, we have revealed the XUV700, and its launch and bookings dates will be announced soon. The fourth product that we said at the start of the year, and we call it ‘Scorpio, Platform Z101’ and all efforts are on, and we are doing everything to ensure that before the end of this financial year, i.e., quarter four of this financial year, we will unveil the Z101. Your second question was in regard to electric vehicles going forward, since the beginning, we have said that the economic decisions of buying electric now and the next four to five years, as per our estimate, is going to be still very scute towards the last mobility products, where our products like Trio and Alpha range of products are present. In Treo, we have Auto, Yaari and Zor, which is a load-version, we are the market leaders with all these three products in the last-mile mobility of people and goods space. We will continue to focus on leadership there. In passenger SUVs, we have already said earlier that the platform of XUV300 will be the electric product that we will bring out. Around three-to-four months back, we have already provided the visibility of our entire portfolio to the media and analysts that first, we will launch an electric version of XUV300, after which we are looking at the electrification of the Internal-combustion (IC) engine version of the XUV700 as a product. We have also spoken about creating Born Electric two products between now and 2026-27. So, there will be a full range of electric vehicles and we will continue to focus and dominate in the last mile mobility space. And a full range of SUVs with the conversion of the IC version into the electric and Born Electric, both, we will bring in the market in the next four to five years.