NEW DELHI (Reuters) – Mahindra & Mahindra Ltd will focus on developing its core portfolio of SUVs (SUVs) and their electric version, a senior executive said Friday after the company entered into joint venture talks with Ford Motor Co.
Anish Shah, the deputy general manager, said Mahindra will focus primarily on large SUVs for its core market in India in the short term and move to electric in the medium term as it sets a new strategy for its automotive business.
“We are going back to our core,” Shah, who will take over as CEO from April, told Reuters.
“We are going to look ahead at how we can accelerate our investment in electric and really move into the new era. We have a clear ambition to be a global brand and the electric journey is an important one there too, ”said Shah.
Mahindra’s high-end electric vehicle Pininfarina Battista is a jumping-off point, Shah said, adding that the automaker would look to develop more electric platforms in India to build SUVs for the local and export markets.
Mahindra and Ford closed their auto joint venture late Thursday due to the COVID-19 pandemic, prompting them to reassess their capital allocation priorities.
The two companies had plans to jointly develop vehicles for production in India for local sale and export to dozens of emerging markets under the Ford emblem.
Mahindra, however, was not convinced that the company would generate the returns necessary to justify the higher investments it would have to make in a post-pandemic world.
Shah told reporters that Mahindra initially planned to invest about 30 billion rupees ($ 410.68 million) in the venture, half of which would be from equity.
Now Mahindra plans to invest the money in electric vehicles, he said, adding that it is open to partnering with Ford in the future, including in electric vehicles.
The review is part of a broader restructuring at Mahindra, with the company leaving several loss-making businesses, including the South Korean unit Ssangyong Motor, to focus on profit and cash flow.
Mahindra said on Friday it was nearing an agreement with a potential investor for its majority stake in Ssangyong, which has been placed in receivership. The total investment in the SUV manufacturer is $ 264 million and the size of the write-off will depend on the agreement, Shah said.
The automaker also pulled the plug on its US electric scooter unit GenZe and aviation company GippsAero last year. Other global subsidiaries include Peugeot Motorcycles.
Mahindra sold nearly 190,000 passenger cars in India in the last fiscal year ending March 31, giving it a market share of nearly 7%, industry data shows.
Reporting by Aditi Shah; Editing by Neil Fullick