Mahindra cars in India are about to become costlier soon
What's the story
Mahindra is planning to increase the prices of its vehicles in the coming weeks. The decision comes as a response to high input costs that have been putting pressure on profit margins. Despite some commodity prices softening, the firm continues to grapple with elevated costs accumulated over the last six months.
Price adjustment
Price hike likely in next couple of weeks
Nalinikanth Gollagunta, the CEO of Automotive Division at Mahindra & Mahindra and Executive Director of Mahindra Electric Automobile, has hinted that a price hike is on the cards. He said, "We are looking at seriously taking a price hike in the next couple of weeks or so." Gollagunta further clarified that while some costs have been passed on to customers earlier, another round of price hikes may be needed to maintain profitability.
Operational improvements
Production challenges largely resolved
On the production front, Mahindra has overcome most of its challenges. The supply constraints related to labor, which had impacted operations earlier this year, have been resolved. Gollagunta said, "The supply chain issues, specifically around labor, is behind us at this point in time." He also hinted that additional manufacturing capacity would be available by the end of Q2 FY27.
Market performance
Mahindra confident about meeting growth targets
Despite production challenges, Mahindra is confident about meeting its growth targets. The company reported a 28% YoY increase in domestic SUV sales for June, with 60,393 units sold. Gollagunta said they are targeting mid-to-high 10s growth in the SUV business and double-digit growth in light commercial vehicles for FY27. He also noted that the momentum in their LCV business is expected to continue through the festive season.