This Diwali, while dealers of automakers Maruti Suzuki India Ltd. and Hyundai Motor India Pvt. Ltd. were stocked with 40-45 days of inventory, Mahindra and Mahindra Ltd. dealers were sitting on just 14 days worth of potential sales. This was not due to some just-in-time supply strategy or anticipation of weak demand by the Mumbai-based utility vehicle major. M&M has been struggling with myriad supply chain issues that have slowed production and deprived the company of sales sparkle during the festive season. A precious loss in a year when earnings have already been decimated.
In March, India imposed among the most severe of lockdowns to stall the spread of Covid-19. For three months, March-end to early-June, the entire economy ground to a halt. When restrictions were eased, businesses were desperate to get back to work to make up for lost time and income. As pent-up consumer demand boosted sales, several manufacturers rushed to fill shelves and stores. Their hopes brightened by the oncoming festivals of Dussehra and Diwali—a time of peak sales for many.
But at Mahindra factories, the lines moved slowly.
Over August, September, October—the months in which India’s auto industry saw the first signs of a post-lockdown recovery—larger players such as Maruti Suzuki and Hyundai dispatched more units than they had over the previous year. But at M&M dispatches were almost flat.
October was particularly bad. Just before Diwali arrived and demand picked up, factory-gate shipments for Maruti and Hyundai rose by 15% and 12%. At M&M, it was 1%.
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