Mahindra & Mahindra (M&M) is considering further collaboration with Volkswagen Group following their recent agreement for sourcing components for electric SUVs. A senior M&M official mentioned the possibility of expanding this cooperation if opportunities arise, during a post-earnings management call on July 31.
Earlier this year, M&M and VW Group inked a supply agreement on components of Volkswagen´s MEB ((Volkswagen open platform for electric vehicles) for Mahindra’s electric platform INGLO.
“For us, we had a very good relation with Volkswagen with regard to (battery) cell purchasing and components of the MEB platform. And that is a very good relation,” said Dr. Anish Shah, Managing Director, M&M.
On the expansion of the agreement, he said, “While there are lots of rumours around on various different things, at any point of time, with any of the businesses, if there is a solid reason to do a partnership that benefits us, that is something we would look at and that is where we are right now.”
Moneycontrol recently reported that Skoda Auto Volkswagen India, the wholly owned subsidiary of VW Group, is looking for a stake sale of up to 20 percent to local players and is in discussions with the JSW Group and Mahindra and Mahindra (M&M).
Rajesh Jejurikar, Executive Director-Auto and FES, stated that Mahindra plans to launch five all-electric SUVs in India based on its new electric platform INGLO, starting December 2024, and the company will be running an annual capacity of 1 lakh units of Born Electric Vehicles by FY25.
The Anand Mahindra led company will be the first external partner to use the unified cell concept, the core element of Volkswagen's battery strategy. The supply agreement will run over several years and will have a total volume of about 50 GWh over a lifetime.
Well prepared for chip availability
Meanwhile, M&M affirmed that it is well armed to battle any impending semiconductor crisis. While the company lost 40-50 percent of the volumes when the chip shortage was prevalent, it is now well-prepared to get alternate supplies.
“The team (at Mahindra) has done a lot of work on backup options for semiconductors (availability). In the past, we never really focused on anything beyond the (tier 1) suppliers who were giving us the components. Now, we were looking at their supplier as well and the multiple options that can be created,” said Shah.
Jejurikar said that M&M has created multiple sources for every type of chip, which have been validated and are now available with the supplier. “We have visibility of those alternatives and where they will come from. We had no visibility of this when the crisis hit us in 2020. Most OEMs didn’t know who were the tier 2 (suppliers) of these commodities. So, we have significantly prepared and will overcome any crisis that may come.”
At present, M&M is currently making 40,000-42,000 units per month, which is about 80 percent of the installed capacity of 49,000 units per month. Jejurikar said the company is looking at growth in “mid-to-high teens” for FY25.
Meanwhile, M&M reported a 5 percent decline in its bottomline at Rs 2,613 crore and 20 percent growth in topline at Rs 27,038.79 for Q1 FY25.
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