M&M Sees Dent In Delivery Woes For Tractors And SUV Production

Concerns about lower volume growth in its SUV and tractor segments - the standout performers in the current fiscal year - have weighed on Mahindra & Mahindra's stock price.

While analysts expect stock performance to gradually improve, Mahindra management is attempting to work around the challenge of chip shortage, which has affected its primary business, for FY2024.

On the product front, the SUV manufacturer has seen strong consumer demand for all of its recent launches, including the XUV700, Scorpio-N, Scorpio Classic, and Thar, with some variants having waiting lists of up to 24 months.

On the other hand, as it attempts to ramp up production, it has struggled to meet customer demand for its passenger vehicle. In terms of tractor demand, it has been consistent, but YoY growth may be slower due to a high base and three Navratnas in FY2023.

The company has sold 3.22 lakh passenger vehicles and 3.55 lakh tractors in the last 11 months. Mahindra has been attempting to ramp up production and had announced its intention to increase SUV production capacity by 69 percent by Q4 FY2024, but a shortage of semiconductors and a strained supply chain have created a stumbling block.

Source- Financial Express 

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