Companies

M&M to help tractor, CV customers as cash crisis looms large

Murali Gopalan Mumbai | Updated on January 15, 2018 Published on November 28, 2016

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Company working out contingency plan to protect farmers and truck operators hit by demonetisation move

Mahindra & Mahindra is working out a plan to help its tractor and commercial vehicle customers hit by the Centre’s move to demonetise high-value notes. This will also extend to its fraternity of dealers and suppliers facing cash flow problems.

“We want to provide a helping hand to those affected in the current situation. From M&M’s point of view, this has more value than selling additional tractors or SUVs at this point in time,” Pawan Goenka, Managing Director, told Business Line.

For tractor customers, the crisis coincides with the critical rabi season where sowing schedules are already lagging behind by 15-20 per cent. This delay is a result of farmers being more preoccupied with withdrawing cash daily and not having the time to work on their fields. They also need money to buy seeds and fertilisers as well as fix broken down equipment in some cases.

M&M is now checking if its dealers can call farmers and ask them if they need help in fixing equipment or in buying seeds/fertilisers. “If they do not sell 10 tractors, the skies will not fall but they will fall for sure if the farmer misses the rabi season,” said Goenka.

The pressures are different for the commercial vehicle customer who needs to rotate money on a daily basis. If his vehicle breaks down and he does not have the money to have it repaired, he will be in dire straits. “The important job on hand for us is to alleviate the pain of customers who depend on our vehicles for their livelihood,” said Goenka.

As a result, the entire M&M sales and marketing team has been asked to head outdoors into every nook and corner of the country. They will talk to customers on their requirements as well as dealers in understanding ground realities. Mahindra Finance will be an integral part of the exercise to help dealers facing cash flow problems. Customers, likewise, can be supported in buying tractors as part of this drive.

Many component suppliers will also need cash to pay their workers at a time when demand has plummeted and bottomlines are under pressure. “We need to ensure that some of our suppliers do not shut down their plants for want of cash,” said Goenka.

The latest update from the M&M field staff is that there have been “lots of improvements” over the last week with farmers now beginning to sow seeds. By now, 70 per cent of sowing should have been done and even if rough estimates indicate that only 50 per cent has been achieved, the good news is that sowing activity has increased.

“If this continues over the next 10 days, we are on safe ground. If rabi sowing happens before December 15, things will be fine,” said Goenka. The crop is then under control and only a little money will then be needed to buy seeds/fertilisers while ensuring that equipment is in order for cultivation.

“Right now, we are not in a desperate situation and soil overall is in good condition thanks to the rains. Tilling followed by seeds and fertilisers becomes vital during the next three weeks,” said Goenka.

It is his view that companies such as M&M must provide a helping hand rather than just focus on protecting their business. “Mahindra is a brand that has a strong connection with its customers and partners. There is a certain expectation from us and it is during times of crisis that people truly show their mettle,” declared Goenka.

Published on November 28, 2016
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