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Mahindra & Mahindra says disappointing December sales on weak festive season in 2018

Updated : January 02, 2019 12:51 PM IST

After Mahindra and Mahindra (M&M) reported disappointing sales numbers for December 2018, the company said last year's weak festive season was the primary reason for the decline in auto and tractor numbers.

In an interview to CNBC-TV18, Pawan Goenka, managing director, said November and December months have been used to sell-off piled up inventory, "January-February-March should see true reflection of where the demand is."

On margins and operating cost front, Goenka said new launches are pretty expensive these days and companies are spending significant amount of marketing budget during that period.

He said when M&M launched Marazzo in September, the company had a significant launch expense and for XUV 300 launch in February, there will a significant expense, "But these launches will not impact margin as it's spread over 4-5-6 quarters and it’s not a very significant amount of money."

Talking about business, he said, “Our market share is at about 42 percent, which is marginally lower than what it was last year, year-to-date (YTD) November and we do expect January-February-March, we will see market share equal to or better than January-February-March of last year and therefore, we should end the year at about where we started in terms of market share."

According to him, tractor industry market size is very small and it’s around 0.5 million units a year, "We are not at all concerned about the market share in tractor industry."
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