Mahindra plans a significant capacity expansion for SUVs

Mahindra & Mahindra riding high on the success of it’s recent launches (XUV700, Scorpio N), is sitting on a healthy order book of more than 2,60,000 SUVs.

Checkout the model wise order book (taken from Company’s investor PPT).

Company’s current production capacity is 29,000 SUVs per month i.e., 3,48,000 p.a. implying an average order book visibility of about 9 months.

However, capacity varies across models and for XUV700 and Scorpio N, the waiting period is more than a year.

Mahindra to cater to the increased demand is currently undertaking capacity expansions and expect to continue expanding in FY24 as well.

In both FY 23 and FY 24, the plan is to increase monthly capacity by 10,000 units per month, thereby increase the total capacity from 29,000/ month as at end FY 22 to 49,000/ month by end FY 24, i.e., 3,48,000 to 5,88,000 vehicles p.a. or a total increase in capacity by 69%.

Model wise expansion plans are provided below (taken from the Company’s investor PPT).

Good times surely seems to be rolling on for Mahindra & Mahindra. How long does it sustain (due to demand and competitive pressures), is anybody’s guess.

Personally, I expect the overall demand to cool down from the current levels. Besides, I also expect significant duplicate bookings in the industry numbers, including that of Mahindra’s.

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