Thomas K Thomas

‘Global experts are knocking on our door to give us the best vehicle’

Thomas K Thomas New York | Updated on January 11, 2018


In terms of new business, we have a short list of things which we won’t look at, says Mahindra chief

From electric vehicles to clean energy to affordable housing, Mahindra Group is on a mission to ramp up its operations across its business verticals. At the core of this push is an ambitious transformational business plan aimed at making Mahindra Group among the top 50 most admired brands in the world. The company has earmarked nearly ₹10,000 crore capital infusion over the next three years not only to help achieve aggressive targets for existing businesses by 2020, but also to expand into newer areas. BusinessLine spoke to Anand Mahindra, Chairman, Mahindra Group, on the sidelines of the Formula E eprix, set against the iconic backdrop of the New York skyline, to know more about the company’s future plans.

This is your third season for Mahindra Racing in the Formula E. How has this experience helped you in developing your electric vehicles ?

Formula E is a live laboratory for us where the future of electric vehicles is being built. What this has done is to put us right in the middle of the ecosystem of electric powertrain developers. When we go talk about production cars or street car technologies to any global cutting edge manufacturers of motors, inverters and anything to do with batteries and so on which make up the powertrain, whoever is doing cutting edge research knows us.

They want to work with us because they see an opportunity for their brand to be known through an association with us. For example, Magneti Marelli, is the one doing our motors right now (for the Mahindra Racing’s e-prix car) and they were the most ecstatic when Felix won the race in Berlin in June (Felix Rosenqvist is the driver for Mahindra Racing’s eprix car).

They have been going to town saying that they are proud to be our suppliers. For them, we become a premium client. When we become premium client in this ecosystem, we get access to the latest technology. That to me is the biggest gain for us, apart from specifics on battery management, how to use it during heat, light weighting of chassis, what happens to tyres- there’s a whole bag of things that feeds into our research value . But the biggest thing from my perspective is that global experts in these areas are knocking on our door to give us the best vehicle.

You have clearly made big bets on electric vehicles. But there is still a lot of uncertainty here in terms of technology, viability and standardisation. How risky is this bet?

When you are challenger brand and when you come from challenger country like India where you neither have industrial experience or capital or the brand history to compete with some of the big boys in the world, you have to take risks. To use the racing analogy, you have to get into pole position. If you have been around for a while and if you have the resources, brand strength and the network, you can still catch up from the back. But if you are a challenger you have to take risks to take pole position. Which is what we are doing. We have already taken a view that the future of auto is electric and that's why we acquired Reva 7 years ago.

To use the same analogy, you are also trying to take pole position in a number of new areas with a big focus on technology. I believe you are looking at using 3D printing for auto components that can revolutionise service centres across the country. How is this shaping up?

We are running experiments in additive manufacturing (commonly referred to as 3D printing). Its confidential so I cannot disclose much details, but additive manufacturing is happening globally. What we are trying to see is how we can do this in rural areas, how familiar can technology be to them. Experiments to make components is not a big deal. People have been using rapid prototyping for years. Challenge is to decentralise it. What is the model one can use for setting up a cottage industry in the villages. That’s the experiments we are doing.

Could you give some insights into other disruptive work being done at Mahindra for the future?

There are ways of looking at innovation — it can be just technology or it can be disruption in services. For example, in our housing business, we want to be a major player in the affordable housing space. We already have two projects. In this area, the way you build the homes has an important role to make it viable. You have to treat construction more like manufacturing. So being in the automotive business, we understand the assembly line better.

We are bringing our expertise in manufacturing to make affordable housing. Then if you look at Club Mahindra, our major competitor is not some other time share company but it is someone like Airbnb. They provide experiences. We have invested in a start-up called XOXO to offer disruptive experiences. We are using this to convert Club Mahindra from being a lodging company to an experience company. To me, this is just as disruptive in the hospitality business as creating battery technology for electric vehicles.

Can you put all of this into context in terms of where Mahindra Group started and how it has evolved over the years. Will you say that what you are doing now is the most significant phase for the group yet?

What we are doing now is very very high aspirational. When Mahindra started in 1945, one could have expected to set such high aspirations. But ironically, when you look back, one of the key goals of our founders post India’s independence was to make India a respected country through the products and services we deliver. In a sense, we are trying to just follow this original vision — to find India a place on the high table of businesses and brands. So, actually we are going back to the future.

Would you have the appetite to venture into new verticals?

We always have the appetite for more because we have an organisation structure that is like an amoeba, you can keep creating new organisms. We run it professionally, it's decentralised, our pipeline of ideas is always flowing, there is no dearth of talent who can execute on these ideas. I see us as the image of a banyan tree.

The goal is that when everyone sees Mahindra Group several years from now, the challenge would be to identify the original trunk. In terms of new areas where we could venture, we only have a short list of things which we don’t look at. I don't like the airlines business not just because it is not remunerative, but also because one incident can damage your brand. One accident and people will remember you for that. I also don’t like being in the hospital business, I would keep that as a CSR initiative. Apart from these two sectors, we are open to moving into all other areas.

The Centre has just rolled out GST. What other policy initiatives would you want from the policy makers?

I would like an environment where the governance moves to regulation and we should not have to ask the Government for help in any way.

Their goal on ease of doing business, they are taking it seriously. The challenge is to move ease of doing business percolate down to the bottom of the pyramid in terms of companies. For large companies, things have got much easier.

But would you need the government to help with driving down cost of electric vehicles?

The government should create an incentive scheme that tapers down over time. There shouldn't be a situation where the government has to give subsidy forever.

(The writer is in New York at the invitation of Mahindra Group)

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Published on July 16, 2017
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