Anticipating a robust surge in demand for automobiles, Mahindra & Mahindra Ltd (M&M) has unveiled plans to invest ₹26,000 crore in its automotive business over the next three years. This substantial investment will span from FY25 to FY27 and will focus on developing new vehicles and expanding production capacity.
A significant portion of this investment, ₹12,000 crore, will be allocated to Mahindra Electric Automobile Limited (MEAL), M&M’s electric vehicle (EV) division. This funding aims to propel MEAL into a dominant position in the electric vehicle market by developing and marketing a world-class electric SUV portfolio equipped with advanced technologies.
M&M’s Managing Director, Anish Shah, emphasized the company’s dual focus on internal combustion engine (ICE) vehicles 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,” Shah stated.
Beyond the EV sector, M&M’s SUV business will receive ₹8,500 crore, and the commercial vehicle segment will see an investment of ₹4,000 crore. Additionally, ₹5,000 crore is earmarked for the farm equipment business, reflecting M&M’s commitment to sustaining and growing its diverse portfolio.
The fresh infusion of funds comes as British International Investment (BII) extends the timeline for its final tranche of investment into Mahindra’s electric platform. To date, BII has invested ₹1,200 crore, while Temasek has invested ₹300 crore. In 2022, BII agreed to invest up to ₹1,925 crore, with Temasek committed to injecting an additional ₹900 crore according to previously established timelines.
M&M’s proactive investment strategy follows a strong performance over the past year. The company achieved a milestone by surpassing 100,000 unit sales in FY24, marking its best-ever sales performance. In the competitive SUV segment, M&M’s revenue market share climbed by 130 basis points to 20.4%, driven by an 18% growth in volumes.
These strategic investments underscore M&M’s confidence in the future growth of both ICE and electric vehicles, positioning the company to capitalize on the evolving automotive market and maintain its leadership across multiple vehicle segments.
