NEW DELHI (Reuters) – Mahindra & Mahindra Ltd will focus on developing its main portfolio of sport utility vehicles (SUVs) and their electric version, a senior executive said on Friday after the company closed talks with Ford Motor Co.
Anish Shah, the deputy general manager, said Mahindra will focus mainly on large SUVs for its central market in India in the short term and will switch to electricity in the medium term as it presents a new strategy for its car business.
“We are returning to our core,” Shah, who will take over as general manager in April, told Reuters.
“We will look ahead to 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 electric journey is an important one “, said Shah.
Mahindra’s flagship electric vehicle, Pininfarina Battista, is a starting point, Shah said, adding that the automaker will look to develop more electric platforms in India to build SUVs for local and export markets.
Mahindra and Ford canceled their joint car company late on Thursday due to the COVID-19 pandemic, which led them to re-evaluate 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 logo.
However, Mahindra was not convinced that the company would generate the returns needed to justify the greater investment it should make in a post-pandemic world.
Shah told reporters that Mahindra had initially planned to invest about 30 billion rupees ($ 410.68 million) in the project, half of which would have been equity.
Now, Mahindra plans to invest the money in electric vehicles, he said, adding that he is open to working with Ford in the future, including electric vehicles.
The review is part of a larger restructuring at Mahindra, in which the company leaves several loss-making companies, including its South Korean unit Ssangyong Motor, to focus on profits and cash flow.
Mahindra said on Friday that it was close to reaching an agreement with a potential investor for its majority stake in Ssangyong, which had been placed under administration. Its total investment in the SUV is $ 264 million, and the extent of the cancellation would depend on the agreement reached, Shah said.
Last year, the automaker unplugged its US electric scooter unit GenZe and aviation company GippsAero. Its other global subsidiaries include Peugeot Motorcycles.
Mahindra has sold nearly 190,000 passenger vehicles in India in the last fiscal year ended March 31, giving it almost 7% of the market, industry data show.
Reporting by Aditi Shah; Montage by Neil Fullick