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Auto and farm equipment maker Mahindra & Mahindra Ltd (M&M) has made one of the highest R&D spends among Indian companies in FY20.
The company spent ₹2,974.98 crore (including ₹2,169.24 crore on capital expenditure) on R&D last fiscal, which was about 6.3 per cent of its turnover.
Mahindra has been making significant investments in R&D in recent years, spending more than 4 per cent of its turnover since FY16. In FY19, it spent 4.78 per cent of the total turnover on R&D.
Its R&D spend of 6.3 per cent of turnover in FY20 is among the highest in the Indian corporate sector, which has traditionally been shy of spending on research. The recent years, though, have witnessed some improvement, with automotive companies pumping in more money in R&D to develop technologies to meet new environmental regulations.
In the West, automakers’ average R&D spend has been in the range of 5-7 per cent. A recent Government of India report revealed that the biotech and pharma segments spend about 5 per cent of their turnover on R&D.
Worldwide spread
“Mahindra is one of the first companies in India to have a full-scale R&D set-up. Today, our R&D ecosystem is spread across the world — in India, the US and Europe — and our major development centre, Mahindra Research Valley (MRV), Chennai, is the Mecca of our R&D ecosystem, spread over 125 acres,” Velusamy R, Chief of Global Product Development, Automotive Division, Mahindra & Mahindra, told BusinessLine .
MRV, which employs more than 2,000 engineers, has played a key role in Mahindra’s launch of new SUVs and tractor platforms. “We have also commissioned a test track spread over 400 acres at the outskirts of Chennai. We have invested heavily in building the R&D talent and created the Mahindra Technical Academy, which is mandated to build the technical competence of the ever-changing automotive industry,” Velusamy added.
Starting with its first major breakthrough, the Scorpio, way back in 2002 to the latest honour of securing a high safety ranking for the XUV300 from Global NCAP based on tough crash test standards, Mahindra could pull everything through by way of its own R&D capabilities, he pointed out.
“Our latest feather in the cap will be the migration of the largest diesel portfolio to BS-VI and building a gasoline engine portfolio in record time,” said Velusamy.
In farm equipment, in addition to developing new tractor platforms, the in-house R&D has come out with smart hydraulics and hill farming technologies for its tractors platforms Yuvo and Jivo.
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