M&M revs up electric drive

Mahindra & Mahindra (M&M) is working on the conversion of its partnering agreement with Volkswagen signed last month, for the use of its modular electric drive matrix or MEB parts into a supply agreement, said Rajesh Rejurikar, Executive  Director, Auto and FES, Mahindra & Mahindra.

He was speaking at the post-results interaction with the media in which the company’s leadership dwelt on various aspects of the business as well the future outlook.

Dwelling a bit more on the partnering agreement with Volkswagen, Anish Shah, the Managing Director and CEO of Mahindra & Mahindra said that while the company has a great relationship with VW and hopes to use parts of the latter’s MEB in its own offerings, reiterated that its the eco-system that “we are looking at the moment as we get ready for global play in EVs”.

M&M signed the agreement with Volkswagen on May 19 to explore the use of MEB parts including battery parts and electric motors in its Born Electric platform. The agreement comes just over a year after M&M called off its joint venture with Ford to make SUVs for the Indian market. Volkswagen, interestingly, has an ongoing tie-up with Ford for its MEB parts. Ford has also exited its India manufacturing activities in India and has also decided not to make EVs at its Chennai plant for global markets for which it has applied for benefits under the government’s production-linked incentive scheme.

On other fronts, Jejurikar said the company was gearing up for the launch of the Scorpio-N and admitted that it will try and improve its forecasting model for the vehicle given that in the case of the XUV700, the company had not anticipated that the demand would be so hugely skewed towards the latter’s top-end variants.

He also said that Mahindra was anticipating a waiting period for the all-new Scorpio, even as it will invest in ramping up capacity to cater to the demand for the XUV700. The XUV700 is manufactured at Chakan, Maharashtra with a production of 5,000 odd units which the company want to ramp up in order to lower its current 19-24 month waiting period. Jejurikar said the company was receiving in the region of 9500 bookings per month for this “blockbuster” product, and just 10-12 percent have cancelled their bookings. Mahindra is also launching its electric XUV300 in the first quarter of calendar 2023 which will be a 4.2 metre SUV.

Jejurikar in his initial remarks also dwelt on the challenges of the last year which he said were rural distress thanks to reduction in government spending, and the unfair terms of trade of farmers. Yet, he said the company had recorded its highest PBIT for the farm segment in the last fiscal. Other challenges or “brakes” as he described them were the supply chain issues which the company is working on assiduously to develop alternative sources, as well as commodity inflation. Overall, there will be uncertainty in fiscal 2023, he added.

In his remarks, Manoj Bhat, CFO, said the company has budgeted an amount of Rs 2500 in partnering and monitoring business, and had so far spent Rs 500 crore.

For both sector including Auto and FES, Bhat said the company was pleased with its overall performance which has seen a 29 percent increase in revenues for both verticals. He added that the three-wheeler electric business in which the company has a 43 percent share is at an infection point.

In the FES segment, the company recorded a 66 percent increase in  tractor exports with South Africa being the latest destination for its products. Jejrikar also added that the company is working on an electric tractor which will be mainly targeted at overseas market and have a limited number of applications. The local market in India is not a part of this endeavour, he said. Overall, the company wants to Mahindra want to continue to build the momentum in exports and build an AG Tech platform on Krish-e

With regard to its commitments going forward,Mahindra & Mahindra said it is expecting a revenues CAGR of 25 percent till 2025. Continued leadership in the LCV segment for under 3.5 tones, lower costs as a percentage of revenues by 3 percent year-on-year which is on track, and to grow its market share in tractors.

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