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Mahindra withdraws from mass market two-wheeler segments in India

Mahindra withdraws from mass market two-wheeler segments in India

Snapshot: The Indian auto-giant has started working on the upcoming Jawa and BSA motorcycles, which are expected to make a public debut sometime in 2019.

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The Indian auto-giant Mahindra has decided to quit the hyper-competitive 'mass market' two-wheeler segments in India. The manufacturer tried hard to consolidate its position in the segment, but the market performance of the Mahindra two-wheelers could not match the company’s sales expectation, which urged the company to pull down the curtain on production.

Mahindra entered the two-wheeler segment nine years ago and since then, it has not performed up to company’s expectation. The sales rate of the company has been continuously degrading over the years and recently the sales figure in the period from April to July witnessed a sink by 77 percent over the same period a year ago. This accounted a total loss of Rs. 2,876 crore for the company and the market share of the company in the segment dropped down to 0.09 percent.

The company has certainly stopped production of the mass market two-wheelers and will withdraw from the commuter market segment, however, the existing sales and service functions will not be stopped. The company is concentrating on developing two-wheeler products for niche markets, which is expected to bring a profit for the company. This means, the likes of Mahindra Centuro motorcycles and Gusto, Duro and Rodeo scooters will no longer be produced, instead the company is focussing on developing the production of Mojo. Moreover, it has started working on the upcoming Jawa and BSA motorcycles, which are expected to make a public debut sometime in 2019. As per the company’s officials, it is focusing mainly on the right sizing the resources to reduce costs of production for the next financial year.

The company is pulling out of the domestic market but will continue to export its mass-market two-wheelers to the countries where it has huge demand. It is noteworthy that the company’s exports have already overtaken the domestic sales in the segment.

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