Very healthy demand has pushed up waiting period for the Thar SUV to over 9 months
The New Mahindra Thar has been a success right from the start. Second gen Thar SUV was launched in the Indian market at the end of last year and the company has received over 50,000 bookings to date.
Out of these, 45 percent buyers have opted for automatic variants while 25 percent bookings were for petrol powertrain options. Mahindra Thar is currently offered in fixed hard-top and convertible soft-top body-styles while the company is also working on a convertible hard top version with test mules making the rounds.
Thar – Bookings vs Sales
In the first 17 days of launch, bookings touched 15,000 units, while by October 2020 bookings had crossed the 20,000 mark. In the month of January 2021 itself, Mahindra received over 6,000 bookings for the new Thar and waiting period has been extended to 6-9 months prompting the company to increase production.
Total sales of Mahindra Thar till 31st March 2021 have crossed the 12,700 mark. Monthly avg of Thar sales star at almost 2,550 unit. Thar registered highest sales in Jan 2021 while lowest sales were registered in March 2021. Reason for low sales and not meeting demand is shortage in parts.
|Month||Mahindra Thar Sales|
Shortage of Steel and Semi-Conductors
Though plans are to ramp up production of the new Thar from a current 2,000 units per month to 3,000 units, Mahindra, like the rest of the auto industry, is facing shortage of steel and semi-conductors. These are critical components, the shortage of which, severely affects production thereby leading to a supply-demand mis-match.
Mahindra reported acute shortage of supply of micro-processors required in Electronic Control Units (ECUs) used in its vehicles and this has led to a significant dip in production and sales in the last quarter of FY 2020-21. These processors are supplied by Bosch, who are the largest suppliers of components in India, not only to Mahindra, but to other OEMs such as Ford and Honda, who have also had to cut production.
Along with increased demand for the new Mahindra Thar, the company also noted a surge in overall demand for utility vehicles which has jumped 11 percent in Q3 FY 2020. Microprocessor and steel shortage would adversely affect production while with new product launches in the offing during Q1 FY2022 which also includes the XUV500, could relate to delays.
Till When Shortage Will Last?
The company revealed that this shortage of semi-conductors could be further extended to Q2 CY 2021. This shortage coupled with rising prices of raw material has caused some concerns for not only Mahindra but for the entire auto industry in India. The company is losing market share on another count and that is specially seen in the case of sales in the states of Tamil Nadu and Andhra Pradesh where demand increases for higher horsepower vehicles.
The company has been unable to tap these markets to the fullest thus bringing down wholesale figures. This shortage of parts only affects the company’s four wheeler segment while production and sales of Mahindra tractors and three wheelers is currently on track.