M&M is offering customized finance packages to customers: Veejay Nakra, CEO, Automotive Division
Veejay Nakra, CEO - Automotive Division, Mahindra & Mahindra Ltd, talks about the response the company is getting on Thar, waiting-period for customers, companys strategy to strengthen the SUV portfolio, finance schemes and launches that can be made in future among others during an exclusive chat with Swati Khandelwal, Zee Business.
Veejay Nakra, CEO - Automotive Division, Mahindra & Mahindra Ltd, talks about the response the company is getting on Thar, waiting-period for customers, company’s strategy to strengthen the SUV portfolio, finance schemes and launches that can be made in future among others during an exclusive chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: Congratulations for the brilliant response that you are getting on Thar and the kind of waiting that is going on and how long any our audience will have to wait if he/she wants to own it?
A: First of all, today’s morning bookings have already crossed 13,500-units. You have rightly said, we are delighted and overwhelmed with the response that our all-new Thar has received. If we talk about the waiting period then before the launch, we were expecting that the delivery that we will make to the customers will be around 2,000-2,500 units per month. Obviously, with this overwhelming response, we are increasing our capacities and now we have a capacity of around 3,500 units per month. At the time when I am saying this, I would like to clarify that the capacity that we are increasing is part of the complete investment that we have made on this platform and this capacity expansion was already included in it. So, this is not an additional investment. As far as the delivery period is concerned then as you have said that many variants are available at different prices, but there are one to two constraints in our capacity, typically in the Hardtop. As we are seeing the response that we are getting on the Hardtop variant with automatic transmission is in maximum demand. So, we are ironing out these constraints and as it is done by January, we will be at a 3,500 units’ capacity per month. For now, the waiting period for customers will roughly vary between four to twelve weeks.
Q: In the overall SUV space has been buzzing for the past few years and traditionally you have been an SUV player and you are dominant in the area. So what kind of response you are getting from the consumers' side as we are talking ahead of the festive season and tell us about Mahindra’s strategy to strengthen the SUV portfolio?
A: First of all, the good news is that the demand at this point of time, not only for Mahindra bur for the entire industry, is very good and strong, as we are getting to the festive season. Although the first two-three months, mainly April and May, there was a server drop in demand because of the pandemic. But clearly, what we are seeing now is demand is back and this demand is not restricted to SUVs but it is also in XUVs, small commercial vehicles, may we talk about Bolero, Scorpio and XUV 300 our pickup range or load vehicles, which are smaller than those like our Jeeto and Supro, we are seeing demand everywhere. And, we feel that initially, this demand was a rural phenomenon but now we can see demand in both rural and urban areas. We all know that when it comes to rural then agricultural output and monsoon have been very good this year. If seen from the long period average than 107%, if we have a look at reservoir levels than they are above 100%, crop pattern is also very good. So rural has been strong right from May, urban is also strong and before reaching to the festive season, the demand is clear. Our focus and strategy will be on to keep our focus on profitable growth. An important part is that if we will talk of the market share or strategy then market share is output and many inputs go into it before we go to the market share figure. And in the case of Mahindra, as I have said earlier, that Mahindra’s Transition 3 in April from BS-IV to BS-VI was planned in February and March but because of the COVID, the disruptions in the supply chain has happened and as a result of that ramp-up to BS-VI has taken a little bit of time, but we have shorted that all now. The way we are going to the festive season and we have launched Thar, we are very confident of delivering good volumes and profitable growth.
Q: Vehicle finance is a big element of your business and what kind of activity is visible there and have you launched some attractive finance schemes to drive sales? Are you looking forward to some innovative ways beyond the launch of Thar in form of discount or offers to boost the consumer sentiment?
A: As far as discount about which you are talking is concerned, normally it happens when capacities and production are higher than demand. As I have said earlier demand is strong, not only that and if you see for example if we talk about the pricing of Thar then we have made a price value correction of our XUV 300 then prices are anyway very attractive. As you rightly said, finance plays a very important role not slight discounts and on the finance front, we have done few things and like we have tied-up with every financer and are providing customized finance packages to the customers. We understand that different customers at different places across India have different challenges, some are from service class, few have a business and some are in small SME business and they are facing different challenges at this point of time, although life is coming back to normal. So, we came out with customized finance options in which you may ask for seven-year financing against four years that was provided in a few products in the past. So, we have increased the loan tenure and dropped the interest rates to balance EMIs for the customers.
Besides, we have seen good traction on an innovative product, Subscription, which was launched last year. What we have done here is that many customers feel that today for social distancing and personal use I need a vehicle but probably in a long-term, I will not need it and for that purpose why should take a loan, make down payment and pay interest and why should I baulk for all these things. So, we have launched a subscription under which we are getting traction, where you need to pay as you go. For instance, as you recharge your mobile based on your usage, where you pay a fixed amount of the month and it includes your car, its servicing and maintenance. If we talk about XUV 300 then at an expense of around Rs 24,000-25,000 for a month, the customer gets everything from the vehicle to service to insurance and the passenger can use the vehicle as long as they want and after that, if they want to own it then they can convert it into ownership or can return the vehicle to us. So, these are the kind of innovative products that we have launched for the customers to increase the demand.
Q: I would like to know about some exciting and innovative launches in this festive season this year or you would like to consolidate what you have in your hands?
A: Currently, we would like to consolidate what we have with us for FY21. Going forward we have two launches but for now, it is Thar and a lot of focus on Scorpio, Bolero, Pickup and small commercial vehicles.
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