Expecting a surge in auto demand, Mahindra & Mahindra Ltd has announced plans to invest ₹26,000 crore in its automotive business over the next three years. Of this, ₹12000 crore will be invested in the electric vehicle unit Mahindra Electric Automobile Limited (MEAL).
The investment will be made between FY25 and FY27 for developing new vehicles and building up capacity. M&M’s SUV business will get ₹8,500 crore investments, while commercial vehicles will get ₹4,000 crores. The company will also invest ₹5,000 crore in its farm equipment business.
“The focus is on ICE and electric vehicles. ICE is important for us and we will continue to invest in it. In electric vehicles, we feel we can be in a dominant position. We have the technology and with the products launched, we can become a significant player in the space. This is what is causing us to invest in both,” said Anish Shah, Managing Director of Mahindra & Mahindra Ltd.
Mahindra & Mahindra is expecting a growth of mid- to high-teens for this financial year and plans to have up to 30 per cent of its SUV portfolio be electric by 2027.
The company plans to ramp up capacity and increase SUV (THAR 5D, XUV3XO/4OO) capacity by 5,000 units, electric vehicle capacity by 10,000 units by FY25, and an additional 8,000 units of electric vehicle capacity by the end of FY26. The company aims to have an overall SUV capacity of 72,000 units by FY26.
Further, Mahindra & Mahindra plans to introduce 9 new ICE SUVs, 7 Born Electric Vehicles (BEV) and 7 Light Commercial Vehicles (LCV). Out of the 9 ICE SUVs, there will be 3 mid-cycle enhancements, including the launch of XUV3XO.
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“The funds (₹12,000 crore) infused by the company will be utilised by MEAL primarily to create and market a world-class electric SUV portfolio with advanced technologies,” M&M said.
The fresh investments come even as British International Investment has extended the period for the final tranche of investment into Mahindra’s electric platform. BII has so far invested ₹1,200 crore, and Temasek has invested ₹300 crore in this platform. In 2022, BII announced a deal to invest up to ₹1,925 crore. Temasek will invest another ₹900 crore as per the earlier agreed timelines.
M&M has had a good run over the last year with auto sales zooming. The company crossed 100,000 in unit sales for the first time ever in FY24. In the SUV segment, its revenue market share has moved up 130 basis points to 20.4 per cent, with an 18 per cent growth in volumes.