Two wheelers..... was it Mahindra's biggest mistake?

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 losses.