Mahindra & Mahindra Ltd, India’s largest sports utility vehicle and tractor maker, is bullish on its latest acquisition of REVA Electric Car Company. The company has big plans of being a leading player in the electric vehicles (EVs) market, globally. Pawan Goenka, president (automotive and farm equipment sectors) for M&M, shared some of his plans for the new company, Mahindra REVA Electric Vehicle Company Ltd, with Mahesh Kulkarni. Edited excerpts:
It seems Mahindra is on an acquisition spree. You acquired the two-wheeler business from Kinetic and you bought back stake in a JV with Renault and now you have acquired REVA. What is the plan?
It is the first acquisition for Mahindra’s automotive division. The buyback of holding in Mahindra Renault is not an acquisition for us. We are looking at our needs and what we need to do to fill the gap in what we want to do. By buying back stake from Renault, we wanted to ensure continuity for our customers of the Logan (car) in terms of after-market support. Logan has more potential.
With REVA, we continue to provide sustainable mobility solutions. We have done many things on our own. We pioneered a micro-hybrid vehicle in India. We have 50,000 vehicles on the road already. REVA has brought in the right mix for us. They had both technology and the product. In the EV space, REVA is the best bet for us right now, globally.
Mahindra Group is very aggressive. We know no limits. Everything we are doing is through a clear strategy. After taking over Kinetic, we have grown the two-wheeler business to over 10,000 units a month. We are also developing new products in that space.
What is your long-term strategy with the acquisition of Reva?
We are in a different technology segment. It’s going to take some time. For any company with long-term strategy, it takes some time to grow the market. For every automotive company, it’s going to be difficult a few years from now, as alternative technology will emerge as the main business. Today, it does not seem to be big. But, five to 10 years from now, the overall alternative technology stream will become mainstream business in the automobile sector.
We are betting big on electric and hybrid vehicle technology. The acquisition of REVA gives us three to four years of immediate advantage. It is managed by technocrats. Chetan Maini is most respected globally in the electric vehicle segment. We will bridge the gaps that are missing in REVA. We have a vast distribution network and sourcing arrangements. We will bring down the cost of Reva through better sourcing of components.
What kind of investments are you going to make in the company to grow the business?
We have put in Rs 45 crore, which will take care of immediate requirements like setting up new plant. REVA has already started work on the new plant and we will further invest on toolings for new vehicles. We will pump in more money, as and when it’s required.
Going forward, how many vehicles will be electric and how many hybrid vehicles in the new company?
We already have the Bijlee three-wheeler in the hybrid space. We will improve that vehicle with REVA technology. We will talk to Mahindra REVA, the new entity, as to how Bijlee can be improved. Second, we have Maxximo, the light commercial vehicle, which we have been working on for some time. We intend to launch by the end of this year. We will try and improve it with REVA technology. Third, we have improved versions of REVA — NXR and NXG — which are almost ready for launch. All electrical parts are completed. But, a lot of fine details are to be worked out and fine-tuned over the next 18 months.
After launching these two vehicles, we will look at what next can be done. We will think of developing new platforms later. Right now, the plan is for Bijlee, Maxximo, NXR and NXG.
Will there be any SUV on the EV platform?
Right now, there is no plan. It is certainly feasible to make and sell Scorpio and Bolero on the EV platform. But, at what price is the question we have to look at.
How many years will you take to break even?
It is very difficult to answer this question at this point in time. It is a matter of three things. It depends on what kind of volume growth and cost reduction in components we can make. I don’t want to make any guesses in this direction. Once we achieve the ramp-up, we will be able to make a guess on that. In seven-eight years from now, we wish to reach a sales mark of 50,000 units per annum in India. We will be a leading player in the country’s electric car market, with more than 50 per cent market share by 2020.