Building on strong popularity and customer loyalty in rural and suburban markets, Mahindra and Mahindra Ltd (M&M) are hoping that their proven and robust Scorpio and Bolero utility vehicles to drive volumes through the difficult months as the overall passenger car segment tumbles to recovering. Although the company has lost substantial market share to key rivals in the sports utility vehicle or SUV segment, including Maruti Suzuki, Hyundai, and Kia Motors, in the past in the Tier 1 cities, faster demand recovery in Tier 2 and smaller towns is a good boon for M&M’s portfolio mix.
More than 50 percent of Scorpio and Bolero sales come from semi-urban and rural markets, according to Veejay Nakra, Chief Executive Officer, Automotive Division, M&M Ltd. Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan are the top contributing states for both brands, Nakra said, adding that the business has also seen strong traction for Bolero in the north-eastern states and Odisha, while Jharkhand and Haryana are well contributing to Scorpio. Despite the COVID-led crisis, Nakra said Bolero, Scorpio, and the pick-ups were witnessing a demand that was almost similar to that of June 2019, fuelled by rural and upcountry markets.
In May and June, rural markets reported a strong recovery based on several tailwinds including pent-up demand, robust harvest season, government spending leading to improved cash flows, good reservoir levels, and better than expected Kharif sowing. After recovering volumes in May, M&M announced a 12 percent y-o-y rise in its tractor sales in June. M&M, which resumed production in May, is currently running its vehicle production plants at a capacity utilization rate of 30 percent. The company is looking to further improve its capacity usage, change its production schedules, to produce more Bolero and Scorpio models to meet the demand of the industry.
Nikunj Sanghi, founder of JS Fourwheel Motors Pvt Ltd, an Alwar-based M&M dealership, Rajasthan said Bolero’s passenger vehicle, pickup, and Scorpio saw a strong recovery from pent-up demand and improved feelings from customers. JS Fourwheel, with two main branches and five outlets serving four districts in eastern Rajasthan, delivered 93 Bolero units last month, compared with 80 in June last year. “Bolero diesel is highly favored over passenger and pick-up models. The Scorpio has repeat customers who very much loyal to the vehicle. Both these vehicles have a supply constraint, “Sanghi said.
