Mahindra Two Wheelers cuts 250 jobs in business rejig

07 Jul 2016


Mahindra & Mahindra Ltd (M&M), which entered the two-wheeler business a few years ago with an entire range of motor cycles and mopeds, is now restructuring the division after the vertical found the going tough.

Having failed to meet expectations, M&M has already given voluntary retirement scheme (VRS) to 250 workers as part of the rejig.

''Two-wheelers is certainly one vertical where we have not met our expectations. Last year, the response to our offerings was not what we were looking forward to. We are currently in the process of re-strategising our two-wheeler business and deciding what the way forward is,'' Pawan Goenka, executive director, M&M, told reporters, without disclosing details.

He said the company will be able to make a formal announcement on how to proceed further on its two-wheeler business in the next couple of months.

''A formal announcement will be made in the next couple of months,'' adding, ''Volumes were not as we planned.''

Asked if M&M was also thinking of exiting the two-wheeler business, Goenka said, ''It is very unlikely. What we have done is 'right size' our plant. We have given VRS to probably around 250 people.''

M&M's two-wheeler sales had declined by 12.7 per cent at 1,33,355 units in last financial year, figures available with the Society of Indian Automobile Manufacturers (SIAM) showed.

The company sold 13,549 units in the April-May period, down 38.21 per cent, compared with 21,930 units in the year-ago period.

The company's scooters business has fared better with models, such as Gusto, Rodeo and Duro, than motorcycles, such as the Mojo and Centuro models. Goenka said the company would focus on Mojo and the scooter model Gusto 125.

He said currently the company was working with Italian design firm Pininfarina, which it had acquired last year to develop a new vehicle, but refused to share any details.

Pininfarina is also helping M&M's other products, including the compact SUV, TUV300.

Confirming the development of its new product with SsangYong's X100 platform, which is also based on SsangYong Tivoli (soon to be launched), Goenka said: ''That will give us a mid-range crossover vehicle that we don't have in our product offerings.'' On safety and emission norms, he said preparations for the upgradation to BS VI emission norms from BS IV were on in full steam and a total of 30 models, including variants, have to be upgraded and homologated at a per unit cost of it ?95,000.

Goenka said the company was also working on development of petrol engines and by 2020 all its mainstream models would have petrol options.

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