Mahindra May Hike Vehicle Prices Again As Steel Costs Remain Elevated | Mahindra's Rajesh Jejurikar

Chaitan, thanks and good morning and good to be on the show with you. It's always of course better when we've come out with a very strong set of numbers which we all feel good about. So you recap the numbers so I'll just kind of try and focus on the story behind them. So I think two three key things. One is you know we showed a very strong SUV performance. We grew 22%. This was on the back of you know strong products that are there in the market and you track very closely so you know our products are doing well. The electric SUVs have done well as well. So the SUV portfolio has done well. We gained market share and our revenue market share this quarter went up almost by five, over five percentage points to 27% at number one position again. The tractors had its highest ever market share in a quarter. So we had a 45% market share which is the highest ever quarter market share. The LCV market share grew as well by a very healthy number to you know 50% again. So the three core businesses of ours had very strong market performance. While doing this we also managed margin very well. So you know the auto standalone margin without electric SUV manufacturing subcontract had a margin of 10% again. The tractor, the farm standalone business had a margin of 19.8%. So strong margins, good market growth, of course leveraging operating, getting benefit of operating leverage as well.

Yeah so you know we are seeing a strong pick up in rural demand through quarter 1. That is a season you know for tractors and tractors had a very good quarter one with good strong growth. So we feel good about rural demand improving. The factors that are at play here are the monsoons of course which you know we are all everyone is tracking and the monsoons are 7% above long period average. The other enabling factor is the spending that the government is doing in rural, especially public distribution system. So that's a strong enabler which is also putting money into the rural market. So you know that is beginning to drive rural demand positively and we are seeing that in sales.

So you know we've spoken about this earlier Chaitan. We've got you know a set of objectives that we have for ourselves. A lot of our objectives are around how do we make sure we hit the sweet spot with our customers through our products and you know what is the core of our product offering. And in the case of SUVs as you know it is about giving authentic SUVs you know which are adventure ready and have a certain unmissable presence on the road. You know when we have a strategy like that then we stay very focused on how we will be number one revenue share because you know our average price point is higher than others for SUVs. Now because that strategy is working well, it is giving us an advantage today to make us you know also the number two passenger vehicle company as you said but that's not our you know going in objective because we do realize that over a period of time if we are playing that volume game then we have been in segments in which we are not, which may be either you know the smaller cars or micro SUVs which we've chosen consciously not to do. So we stay core to our objective which is you know staying strong, having the right products and products which support our brand DNA which is what I just played out for you.

I think we stay you know on some basic principles which is keep cost tight so that you know we don't let get too carried away with success and keep adding cost. So we keep our cost structure very tight in the business. We focus on making sure that volume momentum continues. So where we need to make a correction in our value proposition either by way of introducing a new variant or by creating some excitement in the market we do that. So it's working around some good strong basic principles of keeping cost tight and making sure value proposition to the customer doesn't get affected. And of course the innovation pipeline, the technology that we're trying to bring into the country at very affordable prices so customers get the value of that. So these are some basic principles we try to follow.

Yeah so one is of course we try to control other costs but we do worry right now about the commodity inflation that is there in the environment, especially steel prices are worrying. They've gone up 6% in the quarter one. So we are you know very mindful right now that the commodities are getting into an inflationary trend. So you know I think bringing in steel prices under control should be a very important part. So in times to come do we expect some price hikes? Because steel forms about 67% of... We just took some Chaitan and if needed then we'll of course have to take some more but the steel trend is worrying right now.

Yeah. So right now in quarter 1 actually electric SUVs was 8% of our total SUV which is a good trend. If you remember we have been talking about by 2027 20 to 30% of our portfolio will be electric. We are right now at 8% which is a good start. That's been the first full quarter that we've had of electric SUV sales. So our objective is that you know it'll be a balance and 20 to 30% of our portfolio will be electric and the balance would be ICE and there's a very strong pipeline of both ICE and EV.