NEW DELHI (Reuters) – Mahindra & Mahindra Ltd will focus on developing its core portfolio of sport utility vehicles (SUVs) and its electric version, a senior executive said on Friday after the company ended joint venture negotiations with Ford Motor Co.
Anish Shah, the deputy managing director, said that Mahindra will focus mainly on large SUVs for its main market in India in the short term and will switch to electric in the medium term as it outlines a new strategy for its automotive business.
“We are returning to our core,” Shah, who will take over as managing director from April, told Reuters.
“We are going to see how we can accelerate our investment in electricity and really start moving into the new era. We clearly have the ambition to be a global brand and, again, the electrical journey is important, ”said Shah.
Mahindra’s next-generation electric vehicle, Pininfarina Battista, is a starting point, Shah said, adding that the automaker would develop more electric platforms in India to build SUVs for local and export markets.
Mahindra and Ford canceled their automotive joint venture due to the COVID-19 pandemic, which prompted them to reassess their capital allocation priorities.
The two companies had plans to jointly develop vehicles for manufacturing in India, for local sales and export to dozens of emerging markets under the Ford emblem.
However, Mahindra was not convinced that the venture would generate the necessary returns to justify the biggest investment he would have to make in a post-pandemic world.
Shah told reporters that Mahindra had initially planned to invest around 30 billion rupees ($ 410.68 million) in the venture, half of which would be shares.
Now, Mahindra plans to invest the money in electric vehicles, he said, adding that it is open to collaborating with Ford in the future, including in EVs.
The review is part of a broader restructuring at Mahindra, under which the company is closing several loss-making businesses, including its South Korean unit Ssangyong Motor, to focus on profits and cash flow.
Mahindra said on Friday it is close to closing a deal with a potential investor for its majority stake in Ssangyong, which has been put into bankruptcy. Its total investment in the SUV manufacturer is $ 264 million and the extent of the cancellation would depend on which deal is closed, Shah said.
The automaker also shut down its GenZe electric scooter unit and aviation company GippsAero last year. Its other global subsidiaries include Peugeot Motorcycles.
Mahindra sold about 190,000 passenger vehicles in India in the last fiscal year ended March 31, giving it almost 7% market share, industry data show.
Reporting by Aditi Shah; Editing by Neil Fullick