In the highly competitive automobile sector, Mahindra & Mahindra’s focus will be on achieving leadership in revenue market share and product quality, rather than being a price warrior.
“Be it SUVs, electric vehicles, or two-wheelers, this is our guiding principle,” Anish Shah, Group CEO and managing director, Mahindra Group, told FE in an interview on Thursday.
M&M is already the market leader in terms of revenue in the sports utility vehicle (SUV) segment and is confident of achieving the position in the EV section in the near future. Maruti Suzuki is the largest volume player in the SUV segment, which is driving the passenger vehicle market today.
“We will continue to focus on product quality and make authentic SUVs. In terms of product quality and revenues, we will continue to be the market leader,” Shah said.
The company will pursue a similar strategy in the emerging segment of electric vehicles. “Revenue market share is very important for us because it will translate into the bottom line. We are confident we will take leadership in this (EV) space also,” Shah said.
He said India is still in the early stages of a shift towards EVs and the real products will start rolling out now. “There is a big difference between the EVs that are in the market today and the born electric models that will start to come soon. EVs have been successful because there are consumers who are in love with the product,” he said.
The company is not only focused on manufacturing the product – EVs – but wants to get into the entire value chain as well. As part of the plan, M&M is looking at manufacturing lithium-ion batteries, and is in talks with German major Volkswagen.
“We have a good partnership with them (Volkswagen) on cells and motors, and that’s one of the reasons that we are talking with them on whether we should put a plant in India jointly,” he said.
On subsidy schemes such as FAME for promoting EVs, Shah said that while any incentive will, and should, have limited shelf life, it’s important if a transition is needed from one kind of technology to another to attain the objective of lower emission and cutting down on fuel import bill.
“The kind of switchover which happened in the three-wheeler space with incentives like FAME would not have happened otherwise. Around 54% of the three-wheeler market is on electric today. It’s going to take time to achieve a similar success in passenger EVs, but it’s surely going to happen,” he said.
He, however, steered clear of the debate on whether goods and services tax (GST) rate and other similar incentives should also be offered for hybrid vehicles, which are manufactured by Maruti and Toyota. “If hybrids help in achieving the purpose, it may be looked at by the government,” Shah said.
On whether M&M rules out making hybrid vehicles or it may explore the option in future, he said, “Any powertrain (that the) consumers want will also be explored by us. For us, it depends on consumer demand.”
Shah also talked about the company’s two-wheeler business, which is generally seen as the weakest link of its business spectrum. Rejecting such a perception, he said, “We are focused on a very specific segment of two-wheelers and that’s the only segment we are going to play in. We have got a very strong collection of brands. It takes time to build a business like this, especially when the leader has a market share of 85%. But the business is built well and the products are outstanding. This is something we see actually being successful and it is just a matter of one step at a time.” He said the company will operate in a niche segment, and not the mass market.
Talking about new-age technologies and their impact on manufacturing processes and meeting consumer needs, Shah elaborated on the work the company is doing in generative artificial intelligence (GenAI).
“It is important for us to be a tech leader in every industry that we are in and for technology to deliver specific outcomes,” he said. Shah said that in cases of maintenance requirement after a breakdown of a production line, the company is today able to save 15% of the time because of GenAI, which can give very specific solutions.
“Another example is that of service shops. Certain parts may not be available at all times, but there are parts from different products which might be identical. This has saved 80,000 hours of wait time for customers,” he said, adding that call centre response time has also come down to five minutes from the earlier 30 minutes.
On the new EV policy announced in March offering concessional customs duty to global manufacturers for importing completely built units for a period of three years, Shah said it has been excellently designed to promote domestic manufacturing. “For manufacturers, who are not in India, it offers them an excellent opportunity to set up a base here, and for incumbents it will help in adding new lines for expansion,” he said.
