MUMBAI: Mahindra & Mahindra Ltd (M&M) on Saturday reported a 33% year-on-year (YoY) decline in its domestic vehicle sales to 24,211 units in July. Sequentially, however, volumes grew, with sales at 18,505 units in June.
Passenger vehicle sales were at 11,025 units, down 34% YoY. It sold 13,103 units of commercial vehicles, which comprise lion’s share of light commercial vehicles (LCVs) with gross vehicle weight or GVW of less than 3.5 tons, down 18% YoY.
Sales of LCVs, of the 3.5-ton category where M&M also sells its flagship Bolero pickup, totalled 12,978 units in July, down 13% YoY. This category has seen strong demand revival across rural and semi-urban markets where these are used to transport goods and for last-mile delivery applications.
Exports stood at 1,467 units, down 45% YoY.
Veejay Nakra, chief executive officer, automotive division, M&M attributed the month-on-month growth in wholesales to the continuous demand revival in rural and semi urban India.
"It is encouraging to see that the enquiry and booking levels in July are significantly higher compared to June, both for utility vehicles and the small commercial vehicles," Nakra said.
However, he warned that supply constraints remain the biggest challenge for the company in ramping up production.
"As we ramp up production, the biggest challenge is on the supply side and working around these challenges is our top priority," Nakra added.
On the farm equipment front, the company recorded its best ever July sales at 24,463 tractors, growing a robust 28% YoY. Tractor exports also rose, growing 15% year-on-year to 939 units in July.
Hemant Sikka, president, farm equipment sector, M&M said, “The strong demand momentum continued, aided by positive sentiment due to good cash flows to farmers, higher kharif sowing, a timely and normal monsoon cumulatively across June and July and continued higher rural spending by the government."
Sikka also added that localised lockdowns in certain states because of rising covid-19 cases and the impact on suppliers led to supply-side challenges during the month.
On Thursday, Mint had reported that sporadic lockdowns in manufacturing hubs like Aurangabad, Pune and Bangalore during July severely disrupted production of tractors, impacting plant capacity utilisation at a time when the demand is high.
Supply constraints, senior industry executives said, are now addressed and tractor manufacturers are ramping up production.
Sikka who is bullish on domestic tractor demand, said, “It is expected that the sentiments are likely to remain buoyant translating into robust tractor demand in the coming months."