INDIA: Mahindra Navistar expects cash break-even soon

By Graeme Roberts | 12 December 2011

Mahindra Navistar announced that they expect cash break-even a year after entry into the Indian heavy-duty trucks market.

Pawan Goenka, president of automotive and farm sector, Mahindra and Mahindra, said: "We shall be able to [see] cash break-even in the next 12 months."

The joint venture (JV) between Mahindra and Mahindra and Navistar, Mahindra Navistar has sold around 2,500 trucks, according to the company's managing director, Nalin Mehta.

While the company's Chakan factory has capacity for 50,000 trucks a year, the company currently sells around 300 trucks a month.

According to the Society of Indian Automobile Manufacturers (SIAM), the medium- and heavy-duty goods commercial vehicles segment in India grew 8.19% year on year to 187,559 units in the April to October period.

The JV plans to launch at least two new models during the second half of fiscal 2012 - a 49-tonne tractor trailer and a 25-tonne tipper for the mining sector, along with some more variants to increase volume and use full factory capacity within three years, according to Mehta.

Goenka conceded the company had taken longer than expected to increase sales. He said, "They [transporters] trust the brand but building confidence takes time."

This has delayed the company's plans to introduce heavy-duty buses and trucks for export.