Mahindra To Revamp Its Two-Wheeler Business

Lower than expected sales have forced Mahindra & Mahindra to take a relook at its two-wheeler business. The automaker has announced a major overhaul of Mahindra Two Wheelers amid reports that more job cuts will take place to lower costs.

The executive director of Mahindra & Mahindra, Pawan Goenka, said that over 200 employees have been offered the option to leave under the voluntary retirement scheme, but the automaker is not looking at exiting the two-wheeler business. He also said that, while volumes have come down, a formal announcement regarding the revamp of Mahindra Two Wheelers would be made soon.

As far as volumes are concerned, Mahindra Two Wheelers saw a sales decline of over 10 per cent in the last fiscal year. The story is as dismal for the two-wheeler maker in the first two months of the current fiscal compared to its performance during the same period in the last fiscal. This has led to the decision to focus on premium scooters and motorcycles that offer higher margins. The company also does not want to stay in the traditional motorcycle and scooter segments where it faces competition from the likes of Hero MotoCorp and Bajaj Auto. This means more focus on products like the Mojo and Gusto 125.

Vinod Sahay, the CEO of Mahindra Two Wheelers, said that with the Mojo's positive brand positioning and acceptance in its segment, the two-wheeler maker now aims to sell 500 units a month, up from the 200-250 units it is selling currently. He also spoke about the same strategy being adopted for scooters, noting that the premium scooter market in India is still nascent. For this, Mahindra Two Wheelers is evaluating its Peugeot range for India. As far as new launches are concerned, Sahay said there are six to seven new launches in the pipeline, including new variants of Mojo and the Peugeot line-up.

The Indian automaker recently acquired majority stake in Peugeot scooters – one of the oldest scooter makers in the world – and looks to benefit from the deal since Peugeot has a footprint across Europe. Mahindra showcased three Peugeot scooters at the 2016 Auto Expo – the Django, Speedfight and the three-wheeled Metropolis. The company also wants to utilise the technological expertise of Peugeot to develop new scooters.