Home-grown auto major, Mahindra & Mahindra (M&M), on Wednesday said it's expecting a bumper festive season for tractor sales and confirmed that joint venture with Ford Motor Company is a pure speculation.
In an exclusive interview to CNBC-TV18, Pawan Goenka, managing director, said the tepid tractor sales growth is not a cause of worry as July-August-September months sales would be slower than last year, adding that September tractor sales likely to be lower year-over-year as well.
According to Goenka, tractor margin is unlikely to be impacted by higher crude oil prices and rupee depreciation, “Margin growth for tractors depend on input costs and volume growth. Input costs have gone up and are likely to go up but with volumes to going up, there will be opportunity to spread fixed costs on larger volumes."
But half of the commodity price increase have been passed on by the industry and the other half is balanced out with volume growth, Goenka said.
Goenka said last price hike was taken on July 1 and the next decision will be after three months post that.
Talking on new launches, Goenka said he is happy with the response to Marazzo and Mahindra & Mahindra's target is to sell 8,000-9,000 units of Marazzo and S201 together.
On association with US-based automobile company, Goenka said, “We have already announced that Ford is likely to use one of the Mahindra platform that we are developing and we could be using a Ford platform for electric vehicles and that Ford already has.”
“The other three alliances could be with regards to Ford using Mahindra engines, one on mobility and one on connectivity,” he said.
Mahindra and Mahindra also have alliances for product development, sourcing, and international operations with Ford.
Goenka said two of the five alliances are close to getting closed, which would likely be within a month.