Mahindra confident on rare earth supplies, sees steady growth in SUV and LCV segments

Mahindra Automotive is currently secure on the supply of rare earth magnets used in electric vehicles, despite new export rules from China, according to CEO Nalinikanth Gollagunta.

“We are covered for most of our vehicles for the next couple of months in terms of existing stocks,” he said. China’s new rules require end-use certification for private metal exports, which has added customs-related delays.

“Most of our suppliers have applied or are in the process of applying,” he added. Mahindra is also exploring alternate materials and sub-assembly sourcing while working closely with the government for faster clearances.

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On auto sales for May, Mahindra and Mahindra (M&M) recorded strong numbers. The company sold 52,431 SUVs, a growth of over 21%, and posted an 8.8% year-on-year (YoY) increase in LCVs under 3.5 tonnes. Gollagunta said, “We had projected mid to high teens growth in SUV volumes, and we are optimistic we will deliver on that.”

Key contributors to this momentum include four new launches from last year: two internal combustion engine (ICE) models and two EVs — the XUV 3XO, Roxx, BE-V, and XEV 9e. “XUV 3XO is doing quite well, and we have increased capacity on the petrol front,” he said. “We are already number one in terms of revenue market share” for the new EVs.

Mahindra delivered around 4,000 EVs in May and about 3,500 in April. With a production capacity of 5,000–5,500 vehicles, the company expects to reach full utilisation soon.

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On market share, Gollagunta said the focus remains on meeting customer demand and delivering on bookings. “If we continue this pace, there’ll be some market share gains, but that’s not something we chase.”

Raw material costs remain uncertain. Steel prices rose earlier in the year, leading to a price increase in May. “It is a highly dynamic situation,” he said. “We are confident there will be a benign environment overall,” but Mahindra is prepared to act if disruptions occur.

Regionally, Mahindra is seeing broad-based growth, with the South showing notable gains in both SUV and LCV sales. “South is traditionally an area where we have punched a little bit lower than our weight,” he said, but recent traction is helping change that.

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In the commercial vehicle space, Mahindra expects high single-digit growth in LCVs under 3.5 tonne. Gollagunta cited three drivers: replacement demand after a few muted years, an improving rural economy, and rising investment in infrastructure and government projects.

“We are hopeful this will be the year we start seeing that replacement cycle and growth coming in,” he said.