Mahindra Two Wheeler Ltd. (MTWL) has seen a drastic fall in domestic
sales in Q1 FY18, having recorded a slump of 81.44pc in total domestic sales of
two wheelers over the corresponding period last year. By 2015 Mahindra &
Mahindra had invested over Rs 1,862.10 crore in MTWL.
However, the subsidiary
company has been unable to record any major progress with a reported loss of
Rs. 615.17 crore in FY16. These losses have just been growing with a Rs. 528.87
crore loss being reported for FY15 and a Rs. 459.29 crore loss reported for
FY14. The company recorded a drop of 66.13pc in domestic sales in FY17 (2016-17
MTWL dealerships across the country managed to sell only 3,664 units
in total for the quarter April - June 2017. Despite the company’s scooter models
like the Gusto and Rodeo doing reasonably well initially when it was launched, scooter
sales for Q1 FY18 have also fallen by 80.35pc.
Managing small numbers, MTWL
sold a total of only 2,727 scooter units for the quarter April-June FY 18 in
comparison to 13,883 units for the corresponding period last year. While the
sale of scooters for Mahindra was falling the industry recorded a growth of
20pc in domestic sales for scooters in Q1 with Honda Motorcycle & Scooter
India Pvt. Ltd. leading the charge.
MTWL witnessed a drop of 84pc in the sales of their motorcycles with
only 153 units of the Mojo being sold. The company's scooter sales also did not
inspire much hope with a drop of 59pc YoY in FY17 for domestic sales of scooters.
Dealers managed to sell only 34,308 units in FY17 which seems quite shabby in comparison
to 84,034 units sold in FY16.
Mahindra has also invested separately in brands such as BSA, Peugeot
and Jawa. Company spokespersons have claimed to be shifting their focus to
niche products that the aforementioned brands are offering. Peugeot Motocycles
S.A.S reported a loss of Rs. 186.82crore for FY16.
Earlier this month Mahindra Racing announced its exit from Moto3
which also indicates their shift in focus from two wheelers to better
performing segments. What remains to be seen is the future of MTWL and with
domestic sales of the company falling drastically one does tend to wonder if
they will ever be able to recover their initial investment or cover their growing
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