Mahindra has announced that it has 2.26 lakh open orders for its SUV line-up as of February 1, 2024, which is a significant reduction over the 2.86 lakh unit backlog the brand had at the beginning of November 2023. The brand says that it receives an average of 50,000 bookings per month, and has ramped up deliveries to about 40,000 units in a month; this, along with a previously announced ramp up in production, has helped reduce the number of open orders Mahindra currently has. Mahindra & Mahindra, and in the one of India's leading automotive manufacturers, has been made significant progress in reducing its backlog, and with the latest figures showing a substantial decrease to 2.26 lakh units. At the Q3 FY24 (October-December 2023) earnings call, Mahindra confirmed that it receives the highest number of bookings for the Scorpio and Scorpio N – about 16,000 per month – and it has over 1 lakh units of these SUVs that are still to be delivered. In addition, the Bolero and Bolero Neo combined rack up about 11,000 bookings a month, and there are only about 10,000 units still to be delivered.
Factors Contributing to the Backlog
- Initially, Mahindra faced challenges due to supply chain disruptions caused by the global pandemic.
- High demand for popular models such as Thar, XUV700, Scorpio, XUV300, and Bolero contributed to the backlog.
Efforts to Address the Backlog
- Mahindra implemented strategic measures to the streamline production and also optimize to supply chain operations.
- The company focused on enhancing manufacturing efficiency and for increasing production capacity to be meet the customer demands.
Impact on Mahindra's Operations
- The reduction in backlog is expected to positively impact Mahindra's financial performance and market competitiveness.
- With improved delivery timelines, Mahindra aims to enhance customer satisfaction and loyalty.
Future Outlook
- Mahindra continues to prioritize reducing the backlog further to maintain its market position and meet customer expectations.
- The company remains committed to delivering high-quality vehicles while ensuring efficient supply chain management.
Conclusion
Further, Mahindra gets about 7,000 bookings for the XUV700 and a similar number for the Thar (including the RWD version), and both have order backlogs of about 35,000 and 71,000 units, respectively. Lastly, Mahindra XUV300 and XUV400 EV see combined orders of about 9,000 units in a month, and still have a delivery backlog of about 8,800 units. The XUV400 received a significant update last month, while prices for the XUV300 facelift are expected to be announced this month. Mahindra's successful reduction of its backlog to 2.26 lakh units reflects its resilience and determination to overcome challenges. With a focus on operational excellence and customer satisfaction, Mahindra is poised for continued success in the automotive industry.
Mahindra says that cancellations of bookings in the November 2023-January 2024 period increased to around 10 percent due to year-end VIN change. However, the brand also said cancellations are down to less than 8 percent in January 2024.