Some days, Viren Popli said, there are tires on hand at the assembly plants but no wheels. And some days there are wheels but no tires. Some days, the president and CEO of Mahindra North America said, they have both wheels and tires but no vehicle bodies to install them on.
Mahindra’s relaunch of its Roxor side-by-side line would have had plenty of complications even in the best of times, and 2021 has decidedly not been the best of times, at least for agriculture equipment manufacturing companies.
There are shortages of everything from labor to microchips, rubber to steel, problems that have greatly slowed manufacturing of all sort enough to raise the question: Is now really the best time for this?
“There was a lot of discussion on whether we should do it now or wait,” Popli said.
The way the company has managed the release sheds some insight into how manufacturers are handling these wild times while progressing with their brands. Using limited releases, narrowing the possible models and options and bracing for demand that can’t be quickly fulfilled, companies are learning to weather the around-the-world ripples from the pandemic.
PICKING THE MOMENT
Rereleasing the Roxor was a priority for Mahindra after it had to pull it’s rough-and-tough side-by-side from the United States market in 2020. That vehicle’s similarity to the classic American Willys Jeep was something Mahindra initially celebrated, but the likeness struck too close to home for Fiat Chrysler Automobiles, who owns the rights to the “Jeep trade dress.”
So, a whirlwind redesign by Mahindra — the India-based manufacturer of tractors, automobiles, implements and utility vehicles — produced something different enough to get a stamp of approval from the courts. It wasn’t gone long, but the world the Roxor came back into in 2021 was far different from the one it left, with shortages in both the supply chain and in the labor market vying for the biggest headache a company might face.
“I had to weigh this on both the supply chain side as well as considering that this is a thing we’ve been working so hard at and something my people on the shop floor and waiting for,” Popli said. “I needed them to get back to work, to get people on track, and if you wait too long sometimes, you don’t have anyone to do it.”
In a perfect world, Popli guessed, the Roxor may have been released mid-summer, three or four months before it’s November unveiling. The company decided to pull in the reins, however, to let a stock of parts accumulate.
“We just needed to make sure our supply base was set up and our parts supply firm and robust,” said Rich Ansell, vice president of marketing for the Roxor brand. “November probably isn’t the ideal time to be launching a product like this, but when you look at the seasonality of side-by-sides, it’s relatively flat with a little growth season in April, May and June, but there was pent-up demand and we didn’t want to wait any longer.”
Mahindra is employing a handful of strategies to try to make an effective release given the restricting issues.
AgFax Weed Solutions
For one, it launched the vehicle at just 71 of its 500 total dealers. About two-thirds of those dealers had preorders on the books before the vehicle went live in early November.
“Dealer orders have been way ahead of what we projected,” Ansell said. “Keeping up with demand is something we’re going to need to manage carefully. We’re producing what we can produce given the supply we have.”
The vehicle also launched with limited options. There were just two colors announced, red and black. And there were just two trim models, a base and a cabbed version that includes an 8,000-pound winch and heat and air conditioning.
That limits the potential options to four whereas some similar vehicles from competitors might have dozens.
“Let’s say the market wants 100 of your product and you can only produce 70,” Popli said. “You want to satisfy the largest chunk of that marketplace. When you have the potential to supply 110 and the market only wants 100, that’s when you’re going to create more options that might excite the fringes of your market. We’re entering a marketplace that’s quite constrained, so we want to address the bulk of the market.”
He said red and black accounted for 60% of the sales of the previous Roxor, so made sense to be the first colors out this time. And all those decisions work to limit the vulnerability of dealers — they won’t need to risk having 12 different Roxors on the floor when only six might sell quickly — and to ensure efficiency in manufacturing — there are far fewer parts to keep in stock with four models than 12.
The company also used its Roxor redesign window to consider the wide array of accessories it sells, everything from a $19,575 system to convert the wheels to tracks to $38.61 racks to hold shovels. It eliminated poor selling options to help streamline manufacturing.
Those decisions might help address the parts shortages, but for labor shortages, the company is preparing to tough it out with the staff it has.
It expects to be producing Roxors at about 50% of full capacity initially with hopes to push to higher production rates in the spring.
“The labor situation is not going to go away,” Popli said. “The biggest situation we’re facing right now is labor, the availability of people, and that’s before the trillion-dollar investment in infrastructure. So, for us, it’s very important we utilize the people we have to get things started and moving.”
Popli said the highest turnover has come on the factory floor. Mahindra has tried to fill in there by converting temporary workers to permanent roles, and simply by keeping a calm head, making a point to offer good jobs in lean times and boom years.
“Employees treat organizations the way organizations treat employees,” he said.
It’s all a part of a bet Mahindra has made that despite challenging circumstances, this is the time to bring Roxor back.
“At this point, consumers are willing to wait,” Popli said. “In a better time, they might say, ‘If you have it right now, I’ll take it, but if you don’t, I’m taking something else,’ but now, we’re being trained to wait. To that extent, launching now, the customers are excited and they’re willing to wait for it.”
Joel Reichenberger can be reached at Joel.Reichenberger@dtn.com
Follow him on Twitter @JReichPF