Following a turbulent few years, the Rs 1.75 lakh crore auto-to-software Mahindra Group's flagship firm Mahindra and Mahindra (M&M) is back on the growth path. And it plans to keep its foot firmly planted on the accelerator. From new launches, focus on EVs to a new logo; go behind Mahindra Group's new strategy in Business Today magazine’s cover story ‘The Great Reboot’
Over the past couple of years, Mahindra has seen its auto business get infused with a good dose of new energy, powered by a slew of new launches, a focus on electric vehicles (EVs), and even a brand new logo. Successful back-to-back launches of the Thar, Bolero XUV700, and Scorpio-N have powered the resurgence
Today, M&M is the second-largest player in the less-than-4-metre UV segment. It is also the largest player in the 4–4.7 metre SUV segment, and it is also No. 1 in SUVs by revenue, with a market share of 19.1%. In FY23, Mahindra’s auto business reported Rs 59,815 crore in revenues out of the Mahindra Group’s total turnover of Rs 1.75 lakh crore
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How did M&M redefine its brand and turn around sales? Part of the success can be attributed to ED & CEO of Mahindra’s auto and farm sector businesses, Rajesh Jejurikar’s strategy of expanding the Scorpio, Bolero, XUV and Thar as separate brands under the Mahindra umbrella. As per FADA, M&M’s total retail sales of its automobiles business grew to 320,000 units in FY23, giving it a market share of 8.94%, from sales of 120,000 units and a share of 5.35% in FY21
“When we launched Scorpio [in 2002], primarily meant for youthful, urban audiences, we needed to start evolving our brand to be more modern. By 2020, our portfolio had moved to being less metro city focussed. We had to make our products modern, aspirational and tech-enabled,” Rajesh Jejurikar told Business Today, adding that M&M has done just that over the past three to four years
The XUV700 was another blockbuster for the auto major. M&M said it had delivered 100,000 units by April 2023 since its launch in August 2021. Group MD & CEO Anish Shah says the XUV700 was powered by quick decision-making. “That agility comes from empowering teams. It means faith and trust in leaders and being bold and saying: how can we be the leader in that space? And that’s something you’re seeing in our auto & farm launches and the growth gems," he said
Anish Shah told Business Today that M&M focussed on their core, that is authentic SUVs, with the aim of being the No. 1 SUV player, and as a result, M&M’s SUV market share grew from 13.6% in FY21 to 19.1% in FY23. “Our DNA is SUVs. Focus is the first part of our transformation story. And we took some tough calls and discontinued some of our brands," said Veejay Ram Nakra, CEO for the Automotive Division of M&M
In August 2022, Mahindra unveiled five electric SUVs as part of its Born Electric, or BE Vision. They will be positioned under Mahindra’s two EV brands: XUV and the all-new electric-only brand, BE. Based on Mahindra’s purpose-built INGLO platform and using components from Volkswagen’s MEB platform, the SUVs will be launched by the end of 2024. As per the company, BE is the fifth pillar of M&M’s portfolio
M&M aims to stay No. 1 in revenue market share in SUVs and make 20-30% of its SUV portfolio electric by 2030. It has announced investments of over $1 billion in its EV business. Plus, it has signed a sourcing arrangement with the Volkswagen Group, a leading global maker of EVs. British International Investment (BII), the UK development finance institution, has invested Rs 1,925 crore in a new four-wheeler passenger EV company called Mahindra Electric Automobile Ltd
Anish Shah told BT, “Today, we are not competing only with the traditional companies. In every segment, we are competing with start-ups, and we have to be as agile as them. And that’s something we’ve done tremendously well [as a group]... As you think about our Born Electric SUVs, we will be the No. 1 leader in that space by far.” M&M EVs will be about stunning design, software and human-machine interfaces, said Jejurikar
M&M is also using AI in its cars. The automaker's team has already started integrating tools such as ChatGPT into the new cars. "Since EVs will become quiet inside, the focus will be on branded audio. The competition will be the smartphone industry and not the traditional petrol or diesel cars, powered by ICE or internal combustion engines. Design and tech will be the two key things that will drive future purchases," said R. Velusamy told BT
Anish Shah's strategy for M&M is, 'pick the areas carefully, and pick winners'. "It’s a long-term view. In the short term, there may be some things that may work better. CEOs don’t have the luxury to say, I’m going to focus on the short term at the expense of the long term, or I’ll focus on the long term at the expense of a quarter," he said. His focus on growth with profitability has powered the turnaround so far. “As far as the future goes, whatever we do, we’ll do it well,” Shah added