Mahindra and Mahindra (M&M) have opened 40% of its tractor dealerships as these vehicles were classified as essential services with farmers needing them in high season moving from harvesting to sowing soon, Rajesh Jejurikar, executive director (auto and farm sector), M&M.
The company has enough finished goods inventory of tractors available because sales abruptly stopped towards the top of March, with lockdown coming into effect. Jejurikar said while the dealers had begun to open, it's the NBFCs and financial institutions that ought to start lending to support the demand.
Meanwhile, auto dealers also are ready and expecting the announcement of dates to resume operations. “We believe we've adequate inventory in place to manage the primary few weeks of demand,” he said.
As for restarting manufacturing facilities, Jejurikar said the plan is to start out manufacturing slowly, and therefore the company isn't getting to open plants before the center of May. “We don’t get to because we've adequate finished goods inventory. we might rather establish availability of labor, availability of parts and social distancing and build manufacturing through the slow build-up as we undergo the center of May onwards,” he said.
He also said if anyone was to start out operations on May 3, the labor workforce wouldn't be available. However, that's not the case with M&M because it isn't getting to resume operations at the start of May. “We aren't assuming that we are opening our plants from May 3, we are meaning to open our plants within the middle of May or May third week because we've adequate inventory immediately and there's no point rushing to open the plant or taking undue risks with people within the short-term”.
He added that the company’s cash positions were “good” and everyone's steps were being taken to fortify it. “We are a corporation with good cash positions, low debt, and that we do everything to fortify our cash position and paying vendors on the pre-scheduled timeline and tightening our capital allocation policy mandated by the board,” he said.