Warm welcome to you, Dr. Anish Shah, Group CEO of Mahindra Group and Managing Director of Mahindra & Mahindra. Absolute pleasure to have you here with us this morning on NDTV Profit. Thank you so much for your time. We're having this conversation in the context of a bit of a look back at 2024 and then look forward for 2025. So let me start there. It's been a very exciting year for M&M, a kind of a discovery for the street as well as one of the strongest plays in the SUV/passenger vehicle space.
Good morning, and it's a pleasure to be here. Yes, it has been a very exciting year, but the one point in question is why a discovery now? M&M has been the best performing stock for many years. In fact, there was a Morgan Stanley report in 2018 that had M&M as the best performing stock for 17 years. So from that standpoint, we have been fairly consistent in delivering.
How often do you look at your stock price, Dr. Shah? Just wondering since we started at that, is it something you track?
Not very often at all. It's something I don't track. I don't look at it. When someone sends something to me, I will look at it, but for us, we're building this business for the long term, and that's what's more important. Therefore, our choices today are not driven by what happens every quarter or what happens with the stock price. Our choices have been driven by how we build this business for the long term.
Now let me just come back to the first question, and not from the perspective of how the stock has performed because there are so many factors to that, but an important year for M&M, not only with consolidating your position in the SUV space. Indian customers have now been in love with the SUV format for a long time. M&M well placed now, also this foray into EV is in a very aggressive stance.
Yes, this is something that we had promised, which is that we would develop products which are best in class for the world, and we are very proud of our team for what they've done. We've always said that our products will speak for themselves, and that is what's happening now. We've got two new launches that we've just announced. Bookings will start next month, but the basic thing here is that the inherent quality will stand up to any of the vehicles around the world. In fact, not just stand up, surpass many of them. This is a proud moment for India in terms of an Indian manufacturer being able to innovate, being able to set up its entire technical facilities in the country, and be able to deliver products that we consider to be world-beating products.
Dr. Shah, good morning. I'm trying to squeeze in front of the line to get an early allocation, by the way, for one of the two. But be that as it may, when you just look at what's happening, I mean, when you scan the Vahan data and a couple of analyst houses have done that, it does seem that passenger vehicles as a bucket hasn't had that great a festive season and maybe a post-festive season follow-up, if you will. And if there are high wholesales that have happened industry-wide, the inventory at the channel level is very high. So therefore, one of two things could happen: one is that margins may get squeezed for the space at large because there might be discounts, and two, there might be slower wholesales as well in quarter four. How do you look at the PV demand per se, and are there factors that could change it in 2025?
Good morning. For us, it has been somewhat of a different story because the launches we've had over the past three years still continue very strong. The Thar Roxx, obviously with its success on the number of bookings we've had, the XUV700, the Scorpio N, all still have some element of a waiting period. We are still trying to reduce that by enhancing capacity significantly, so that has come down, but that still is very strong demand. So for us, we really haven't felt the slowdown as much, and that's helped us in terms of our production as well as getting vehicles to our customers in as timely a manner as we can. So yes, there has been an industry, I wouldn't call it a slowdown, I just don't think it's picked up as much as it should. But that's something that in our view is possibly some element of pent-up demand that will pick up as we go forward. So we are not as worried about that because our products today are doing very well.
They are okay. So then the other question is, especially for PVs and then we'll come to tractors as well since you're talking of autos first, but in PVs, could there be a twin-horse race, if you will, that within passenger vehicles, ICE engines might have a completely different demand trajectory versus EVs? Because there might be inventory build-up in ICE engines largely because that was an industry-wide report, but electric vehicles might not, and therefore maybe you have a different trajectory. But the space at large, while I agree I heard you say that there is pent-up demand, could there still be a different trajectory for both?
I think that will depend on the quality of the products in both ICE and EV. That's something that we have been talking about as well. When we have a born electric product, that's when the demand will really go up for those products. We are not seeing the demand because these are electric vehicles; we are seeing the demand because these are products that are outstanding from a customer standpoint. Similarly, for all other automakers, I think it will depend on the products that they bring in for electric. There is an advantage to electric in the sense that you see a greater pickup, you see a much greater responsiveness from the vehicle, maintenance is easier, costs are lower in the longer run. So all of those advantages do exist, and that will enable electric to move faster over the next few years, and that is what we're anticipating. But ICE is not going away. ICE has certain benefits as well, and there are certain consumers who will prefer ICE. Therefore, as a manufacturer, we're ready with both.
Just to talk about the Vahan data that Nju also mentioned, in 10 out of the 11 months of 2024 so far, M&M has grown in Vahan sales. The gap has narrowed with competitors Hyundai, Tata Motors every month, and you've overtaken Tata Motors in November as the number three car maker, in September as well. So definitely now you're sitting at a different trajectory. But just to take forward that EV point, what is the kind of outlook pinned with it? Because right now the industry seems divided. There is one set of players that think that EV is overblown, it's not the future, and maybe hybrid is what will work in an Indian context. And there's one set which is very, very clear on electric vehicles. You're obviously in the EV camp. So Dr. Shah, I ask you, what is the outlook for EV in terms of contribution to sales in 2025, or is it going to take some more time to reach its peak?
So we see a very significant growth trajectory for EVs. The reason for that is the EV powertrain enables in many ways a much better vehicle, and that is far superior to hybrid or even ICE in terms of how you drive the vehicle. So that's one advantage for the customer. There had been concerns in the past around a number of factors on EV with regard to safety, with regard to range anxiety, with regard to charging. All of those have been addressed in the launch that we did. We actually put a battery in fire, we put it in water for 48 hours, we had a nail penetrate the battery, we had a 20-ton truck go over the battery as well, and it survived all of that. That's a level of testing we've done, and this is something we did publicly with 300 people including media, analysts, and investors there as well. So safety concerns have been addressed. From a range standpoint, our vehicles have a rated range of 682 and 656 kilometers respectively, but the real-life range is greater than 500 kilometers. We've tested this in 21 cities across India over the last six months to have a real-life view as to what the range is going to be. With regard to charging, we can now charge the battery in 20 minutes going from 20% to 80% charge. So that's something that really addresses all the concerns that were there on electric. Therefore, electric will grow at a very rapid pace. It is also far superior to hybrid with regard to the policy initiatives in terms of addressing pollution, in terms of having a lower fuel import bill, because the advantages of EV are obviously significantly greater than that with hybrid. So for us, there really is no comparison. When we can develop EV cars like this, it's something that you have to come and sit in the car, drive it, to be able to really feel that difference.
What about the pricing question? And of course, your new launches are priced lower than rivals or what is available in the market. How do you see that panning out, and do you think that sweet spot has been reached now? The big problem with EV growth in India is the pricing.
You're absolutely right. Pricing has been the issue, but that has also been an issue in adapting ICE vehicles to EV, and that's something that we've seen as well. When you have a born electric product that's created with the kinds of engineering teams that we have, it's enabled us to have pricing be very competitive, not just with other EV makers — we're very competitive on that front — but also with ICE vehicles. Because the prices we've launched both our vehicles with will actually stand out extremely well with any vehicle in the ICE category as well. That takes away the concern as well. So powertrain really doesn't become an issue anymore. Customers are going to look for what's the best car, what's the best value for money they can get, and make a decision based on that.
The initial sort of response that you're seeing to the new launch, or that you know from your ground reports, the initial response has been outstanding.
Just amazing. At this point, we have 1.4 billion social media views on what we put out so far, which is far and superior to anything we've done before, including the Thar Roxx. The inputs that we're getting from our dealers and the responses from customers are very high. So again, that's something we will work through over the next month or so, ensuring that everyone gets the test drives and we can set that up in a manner that we can serve all our customers, and then we will take it forward from there.
