Mahindra reconsidering acquisitions as sales dip in November

December 1st, 2008 - 8:39 pm ICT by IANS  

New Delhi, Dec 1 (IANS) Indian auto major Mahindra and Mahindra (M&M) Monday said it will reconsider its plans for overseas acquisitions in the face of an economic downturn even as the company’s overall sales in November went down 69 percent over the year-ago period. “We are always looking for acquisitions, which will suit our portfolio, but the market situation is changing every day and we have to assess how to finance our mergers and acquisitions in times like these,” Pawan Goenka, president of Mahindra’s automotive division, said.

The auto giant was recently in news as one of the prospective buyers of Chrysler’s iconic Jeep and Dodge brand of vehicles. Goenka, however, declined to comment on Mahindra’s plan for the Chrysler units.

Talking of the prevailing gloom in the auto industry, he said November was a tough month for Mahindra and the auto industry as a whole.

The carmaker’s utility vehicle sales, which encompass its primary market, plummeted over 68 percent last month, compared to November 2007 figures, Mahindra later announced in a statement.

Mahindra’s exports also went down by over 40 percent during the period.

“November and December are tough months for the auto industry in normal market conditions also, but in a slower economic environment December will prove to be a uphill task for all of us,” Goenka said.

The overall auto sales (including exports and three wheelers) last month stood at 10,955 units as against 18,583 units a year earlier, a decrease of 69 percent.

Goenka said the slow demand has led to less productions and “many of our plants are working under capacity”.

He warned that the company would not hesitate to shut down its plants if demand further slumps.

Although Mahindra has not taken the retrenchment route, the hiring process has seen a “considerable cut” and the company may have to freeze hiring completely if the situation worsens, Goenka said.

However, the company will go ahead with its plans to introduce new utility vehicle, Xylo (earlier called Ingenio), this month.

Goenka added that the company will introduce two more vehicles next fiscal.

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