NEW DELHI (Reuters) – Mahindra & Mahindra Ltd will focus on developing its core portfolio of sport utility vehicles (SUVs) and their electric version, a senior manager said on Friday after the company entered into joint venture talks with Ford Motor Co.
Anish Shah, the deputy managing director, said Mahindra will in the short term focus mainly on large sports utility vehicles for its core market in India and switch to electric in the medium term as it draws a new strategy for its automotive business.
“We are going back to our core,” Shah, who will take over as managing director from April, told Reuters.
‘We’re going to look ahead at how we can accelerate our investment in electricity and really start moving towards the new era. “We clearly have the ambition to be a global brand, and there the electric journey is important again,” Shah said.
Mahindra’s high-end electric vehicle Pininfarina Battista is a starting point, Shah said, adding that the carmaker will look into developing more electric platforms in India to build SUVs for the local and export markets.
Mahindra and Ford shut down their joint venture late Thursday due to the COVID-19 pandemic, which forced them to reconsider their capital allocation priorities.
The two companies have planned to jointly develop vehicles for manufacturing in India for local sales and export to dozens of emerging markets under the Ford license plate.
However, Mahindra was not convinced that the company would generate the returns needed to make the higher investment in a post-pandemic world.
Shah told reporters Mahindra initially planned to invest about 30 billion rupees ($ 410.68 million) in the business, half of which would have been equity.
Mahindra plans to invest the money in electric vehicles, adding that in the future it is open for collaboration with Ford, also in cars.
The review is part of a broader restructuring at Mahindra, in which the company is leaving several loss-making businesses, including its South Korean unit Ssangyong Motor, to focus on profits and cash flow.
Mahindra said on Friday it was close to reaching an agreement with a potential investor for its majority stake in Ssangyong, which had been placed in receipt. Its total investment in the SUV manufacturer amounts to $ 264 million and the extent of the write-off will depend on the agreed agreement, Shah said.
The carmaker also pulled the plug on the car last year with its American electric scooter unit GenZe and the aviation company GippsAero. Its other global subsidiaries include Peugeot Motorcycles.
In the last financial year, which ended on March 31, Mahindra sold nearly 190,000 passenger vehicles in India, giving it nearly 7% of the market, the industry data shows.
Reporting by Aditi Shah; Edited by Neil Fullick