M&M commits Rs 15,300 crore capex for FY 22-24 capex 

The electric version of this SUV is one of eight SUVs planned by Mahindra & Mahindra

Mahindra & Mahindra (M&M) has confirmed earmarking a total investment of 15,300 crores of which Rs 1,900 crores will be the capex for the auto and EV business play for  FY 2022-24.

Addressing a media meet after the declaration of its results, Rajesh Jejurkar, Executive Director, Auto and Farm, also announced that the first SUV from its  EV portfolio, the E-XUV300  with a length of 4.2 meters is slated to make its  debut in the first quarter of 2023. It will be the first of 8 SUV EVs to roll out as part of its Born Electric vision that the company will unveil on 15^h August 2022 in the UK.

Jejurikar also said the focus at Mahindra will be to consolidate its leadership in both the farm & auto sectors, provide enhanced customer experience, aim at market leadership in 3 wheeler and 4 wheeler EVs, implement overall cost controls and look for alternatives to its supply chains. The company will also aim to team up with like-minded global partnerships wherever necessary.  Mahindra also acknowledged its partnership with Volkswagen to explore the use of the latter’s modular electric drive matrix (MEB) components to be used in upcoming electric cars.

Domestic demand

When questioned if the EVs and new SUVs line up will make it to the global scale, Shah said,  all new EV powertrains that the company develops in India would be highly cost competitive as compared to any of the global players worldwide. However, he said, “We have to first satisfy domestic demand first. Despite the company ramping up capacities to 5000 XUV 700s per month, we have a 10,000+ bookings pipeline. Demand  is still coming in despite a waiting period of  18-24 months,”  he said.  

Asked if M&M plans to make EV sedans, Shah said “Our strike zone has been authentic SUVs and that will stay, hence there is no room for sedans,” Shah said. On the launch of the Scorpio on 27^th June 2022, the company said that customers will have to prepare for a waiting period for the new product line as well.  This time around, M&M hopes to be better prepared with its product mix to avoid delays in deliveries. In addition, M&M has also worked on its supply chain partners to avoid disruptions and reduce waiting time for deliveries.

With regard to the XUV 700 that went on sale in India last year received 50,000 orders in a short period, Jejurikar said,”Despite having such a long waiting period, we have customers willing to wait for 2 years continuing to  make a booking amount of Rs 21,000 even knowing fully well the ground situation. Even if there is a drop, the fall in bookings is not more than 10 percent,” Jejurikar said.  He, however, said that as the company ramps up the capacity with semiconductors supplies expected to improve further, the wait period is expected to come down.

Two-wheeler exports

On the two-wheeler business, post the takeover of Peugeot Motorcycles (PMTC), and after having acquired 51 percent stake in the company in January 2015, Jejurikar informed that company will focus on exports of its Peugeot E-Ludix scooter to Europe and China. There are no plans for an India launch. On the supply chain constraints, Shah said the “the company has one to one relationships with its global suppliers by now and as long as factories don’t shut down due to various restrictions, we can manage with the existing situation.”  M&M achieved its highest ever standalone growth of 29 per cent increase for farm and auto sector at Rs 55,000 crores for fiscal 2022. It delivered its highest UV volumes in Q4 with 42 percent year on year growth In the farm equipment. The company is also eyeing an aggressive growth in Farm Machinery, global expansion, setting up an Ag Tech platform through Krish-e, paring costs wherever possible and growing its market share in tractors. Revenue for M&M grew 28 per cent to Rs 17,124 crore in the period under review as compared to Rs 13,356 crore in March quarter 2020-21.

On M&M’s ESG initiatives, Shah said the company plans to lead in its roadmap for ESG. “Our sustainability actions call for developing Mahindra’s “Planet Positive Vision for 2040,” he said adding that the company will focus on auto recycling, as well as initiatives such as afforestation, watershed management and regenerative agriculture.