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BW Businessworld

Fighting Spirit

Mahindra Group is a $19.4-billion federation of companies that is providing innovative mobility solutions, driving rural prosperity, enhancing urban living, nurturing new businesses and fostering communities.

Photo Credit :

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Financial Year 2020 was yet again a challenging one for India’s automotive sector. And this was before the advent of Covid-19. In FY20, the Indian automotive industry (except 2-wheelers) de-grew nearly 19 per cent, with the passenger vehicle industry growing minus 18 per cent while the commercial vehicle industry saw a degrowth of 28.8 per cent. The UV segment of the PV industry posted a flat performance of 0.5 per cent growth. Due to the overall slowdown in the auto industry leading to lower sales during FY20 followed by abrupt closure of business activities from 25th March 2020 due to Covid-19 lockdown, Mahindra & Mahindra (M&M + MVML) posted a profit of Rs 739.71 crore, compared with Rs 5,401.18 crore during the previous 12-month period, the company said in a statement.

Commenting on FY20, Pawan Goenka, MD, M&M said: “In our tractor business, Covid-19’s impact started with the lockdown happening on March 22-23. But in the auto business, it started in mid-February with a supply chain disruption coming from China and, to add to that, there was a major fire at one of our key suppliers in February end, followed by the lockdown. All this happened when the industry was already in a slowdown. On top of that, we were transitioning to BS-VI. This obviously had a huge impact on our volume and financial performance in quarter four.”

On a standalone basis, M&M posted a net loss of Rs 2,502 crore in the fourth quarter, compared with a net profit of Rs 849 crore during the year-ago period. The company posted total sales of 4,71,141 vehicles (4,11,345 four-wheelers and 59,796 three-wheelers) as against a total of 6,07,548 vehicles (5,37,639 four-wheelers and 69,909 three-wheelers) in the previous year, registering a de-growth of 22.5 per cent. In the domestic market, it sold a total of 4,44,218 vehicles as compared to 5,69,092 vehicles in the previous year resulting in a de-growth of 21.9 per cent. In the passenger vehicle (PV) segment, Mahindra & Mahindra sold 1,86,942 vehicles (including 1,79,405 utility vehicles (UVs), 6,679 vans and 858 cars) registering a de-growth of 26.5 per cent, as compared to the previous year’s volume of 2,54,351 vehicles (including 2,35,362 UVs, 17,451 vans and 1,538 cars). During the year under review, it posted an export volume of 26,923 vehicles as against the previous year’s number of 38,456 vehicles. This was slump of 30.0 per cent.

TACKLING CRISIS

At Mahindra & Mahindra, any crisis situation is handled in a completely different manner. The warrior spirit is well-embedded in the culture of the company as it empowers them to tackle abnormal situations valiantly. Built over the years into their systems, the resiliance empowers the group to not only resist shocks and recover from them, but also deliver. Its business has prospered for 75 years precisely because of its philosophy of ‘rising through crises.’ Mahindra has been able to resist shocks, confront the unknown and perform in the toughest of situations.

In the past, Mahindra & Mahindra has pulled itself out from dire situations — like the cyclical slowdown of 2002 — and constantly showcased a strong character. The company has continued with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through unrelenting focus on cost controls, process efficiencies and product innovations exceeding customer expectations in all areas and enabling it to maintain profitable growth in the current economic scenario.

Overall, the Mahindra Group is a $19.4-billion federation of companies that is providing innovative mobility solutions, driving rural prosperity, enhancing urban living, nurturing new businesses and fostering communities. The group has business presence in more than a hundred countries and derives 50 per cent of its revenue from outside India