M&M Gears Up For a ₹26,000 Crore Investment in Automotive Business

In anticipation of increased demand in the automotive sector, Mahindra & Mahindra Ltd has unveiled an ambitious plan to invest ₹26,000 crore in its automotive business over the next three years. This significant investment will span from FY25 to FY27 and is aimed at developing new vehicles and enhancing production capacity.

Major Investments in Electric Vehicles

A substantial portion of the investment, ₹12,000 crore, is allocated to Mahindra Electric Automobile Limited (MEAL), the company’s electric vehicle unit. The funds will be used to create and market a world-class electric SUV portfolio equipped with advanced technologies. Anish Shah, Managing Director of Mahindra & Mahindra Ltd, emphasized the importance of both ICE and electric vehicles for the company’s growth strategy.

Distribution of Investment Across Business Segments

The remaining investment will be distributed as follows:

• SUV Business: ₹8,500 crore will be invested to bolster the company’s SUV lineup.
• Commercial Vehicles: ₹4,000 crore is allocated to enhance the commercial vehicle segment.
• Farm Equipment: ₹5,000 crore will be directed towards the farm equipment business.

Capacity Expansion Plans

Mahindra & Mahindra plans to ramp up its production capacities significantly. By FY25, the company aims to increase its SUV capacity by 5,000 units and its electric vehicle capacity by 10,000 units. By the end of FY26, an additional 8,000 units of electric vehicle capacity are expected, bringing the overall SUV capacity to 72,000 units.

New Vehicle Introductions

The company has an aggressive product launch schedule lined up, including:

• 9 New ICE SUVs: This includes three mid-cycle enhancements and the launch of the XUV3XO.
• 7 Born Electric Vehicles (BEV)
• 7 Light Commercial Vehicles (LCV)

Growth Projections

Mahindra & Mahindra is targeting a growth rate in the mid- to high-teens for the current financial year. The company aims for up to 30% of its SUV portfolio to be electric by 2027, positioning itself as a significant player in the electric vehicle market.

Strategic Investments and Collaborations

The fresh investments come alongside continued support from British International Investment (BII) and Temasek. BII has invested ₹1,200 crore so far, with an additional ₹725 crore pending. Temasek has invested ₹300 crore and will invest another ₹900 crore according to previously agreed timelines.

Recent Performance and Market Position

Mahindra & Mahindra has enjoyed a strong performance over the past year, with auto sales surpassing 100,000 units for the first time in FY24. The company’s revenue market share in the SUV segment increased by 130 basis points to 20.4%, driven by an 18% growth in volumes.