Published On:May 17 2024
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Mahindra & Mahindra to Invest ₹26,000 Crore in Automotive Sector Over Next 3 Years

Mahindra & Mahindra to Invest ₹26,000 Crore in Automotive Sector Over Next 3 Years

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, ₹12,000 crore will be directed towards its electric vehicle unit, Mahindra Electric Automobile Limited (MEAL).

The investment will span FY25 to FY27, focusing on developing new vehicles and expanding capacity. M&M’s SUV business will receive ₹8,500 crore, while commercial vehicles will get ₹4,000 crore. Additionally, the company plans to invest ₹5,000 crore in its farm equipment business.

Anish Shah, Managing Director of Mahindra & Mahindra Ltd, stated, "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 believe we can achieve a dominant position. With our technology and new product launches, we aim to become a significant player in this space. This dual focus drives our investment strategy."

Mahindra & Mahindra anticipates mid- to high-teens growth for this financial year and aims for up to 30% of its SUV portfolio to be electric by 2027.

The company plans to boost capacity, increasing SUV (THAR 5D, XUV3XO/4OO) production by 5,000 units, electric vehicle capacity by 10,000 units by FY25, and an additional 8,000 electric vehicle units by the end of FY26. The overall SUV capacity target is set at 72,000 units by FY26.

Moreover, Mahindra & Mahindra intends to introduce 9 new ICE SUVs, 7 Born Electric Vehicles (BEVs), and 7 Light Commercial Vehicles (LCVs). Among the 9 ICE SUVs, there will be 3 mid-cycle enhancements, including the launch of the XUV3XO.

"The ₹12,000 crore investment in MEAL will primarily be used to create and market a world-class electric SUV portfolio with advanced technologies," M&M stated.

These new investments follow British International Investment’s extension of the period for the final tranche of investment into Mahindra’s electric platform. To date, BII has invested ₹1,200 crore, and Temasek has contributed ₹300 crore. In 2022, BII announced a deal to invest up to ₹1,925 crore, and Temasek plans to invest an additional ₹900 crore according to earlier agreed timelines.

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


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