India’s Mahindra & Mahindra says demand for cars is outpacing capacity. | Tech US News

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NEW DELHI, Aug 5 (Reuters) – Mahindra & Mahindra Ltd ( MAHM.NS ) said on Friday that demand for its cars was outpacing production capacity as people rushed to buy the automaker’s popular sport utility vehicles (SUVs). are, thereby increasing profits.

The automaker reported a sharp jump in first-quarter net profit as its passenger vehicle sales rose to 149,803, up 74 percent from a year ago, while it had more than 273,000 units. Vehicle booking is open.

“We have started capacity building programs but did not anticipate this kind of demand,” said Rajesh Jejurikar, executive director of the Mumbai-headquartered company.

“We are expanding capacity to make sure we can meet all our demand,” he told reporters, declining to elaborate on how much capacity the company would add. has been

Mahindra said it received more than 100,000 orders within 30 minutes of opening the books for its Scorpio-N SUV, valued at about 180 billion rupees ($2.3 billion) in sales price. It currently has the capacity to produce about 6,000 of these vehicles a month, Jejurikar said.

While demand for cars has remained strong, Indian automakers including Mahindra say they are also seeing an easing of the semiconductor shortage that has plagued the industry since the pandemic. Mahindra faced a chip shortage, which halted the supply of its vehicles last year. Read more

Jejurikar said the company sources chips from multiple locations and there are no early indications of supply disruptions due to Taiwan’s geopolitical situation.

The company reported a consolidated net profit of Rs 21.96 billion for the three months ended June 30, up from Rs 4.24 billion a year ago. Revenue from operations rose 48 percent to Rs 284.12 billion during the quarter.

However, its operating margin declined by 200 basis points to 11.9 percent.

Shares of Mahindra ended the day down 2%.

($1 = 79.2300 Indian Rupees)

Reporting by Aditi Shah; Edited by Susan Fenton, Kristen Donovan

Our Standards: Thomson Reuters Trust Principles.

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