00:00Anishal, thank you so much for joining us.
00:02You've built a very strong EV brand.
00:05Why does this strategy, if you take a 10-year time frame?
00:09The strategy is to be one of the most prominent
00:13and one of the best EV products in the world.
00:17We've got a team that has designed and built
00:22some fantastic products based on inputs that we get from consumers.
00:27There is tremendous value that consumers get in the product as well
00:30in terms of features that are there.
00:32The ride, the handling is wonderful.
00:36As a driver, I've experienced that myself.
00:39It's very difficult for me to go back to ICE products having driven our EVs.
00:44So, on balance, I think we've started very well.
00:47We still have a long way to go
00:49because we need to continue to improve these further,
00:52even though today I would say they stack up with the best in the world.
00:55We need to understand global markets better
00:59because it's very easy to sit in one market and export from there,
01:05but that's not really the recipe for success.
01:07You need to understand each local market,
01:09understand what consumers need in that market,
01:11be able to design vehicles for those markets,
01:15and be local to win,
01:17which is also the reason why we've been very successful in India,
01:20despite all the global players coming in,
01:22because we understand what the consumer wants.
01:24We've been able to design products for the consumer,
01:26and that has helped us create a very strong set of products in India,
01:31and that has made us the number one SUV player in India today.
01:34What milestones, what targets?
01:36Starting with first, greater penetration in India.
01:41We have effectively run out of capacity,
01:46despite quadrupling capacity in auto business over the last few years,
01:49and we're putting in more.
01:51And therefore, the first step is to get that capacity in,
01:56get a higher penetration of EV in India.
01:59By capacity, I refer to both ICE and EV here,
02:01because ICE products also continue to get very high level of demand today.
02:05The second step is to look at a few key markets around the world.
02:09Such as?
02:10We have been present in Australia, South Africa and Chile for many years,
02:14and these are markets where we will further strengthen our position,
02:18compete with all the global players,
02:21and hopefully get to a 10, 15, possibly 20% market share.
02:26Then we will look at phase two,
02:29somewhat in parallel, somewhat after the first phase gets over.
02:32And phase two may be either Southeast Asia or Europe.
02:36And the US would be a little further down the road,
02:41because for the US market,
02:43we need to, again, understand that market very well.
02:45We need to be local there.
02:46And when we come in,
02:48we will come in in a way that we are fully ready to compete.
02:53As you ramp up capacity, what kind of capex are you looking at?
02:56Where would you be investing in?
02:58Would you be adding headcount as well?
03:01So we have publicly talked about $3 billion of capex over a three-year period,
03:08and we are on track for that.
03:10We are in the middle of the second year at this point in time.
03:13In terms of ramping up headcount, yes,
03:15some of that will happen as new plants come in.
03:18And it will also help the ecosystem, because our supply is ramping up capacity as well for us to be able to deliver this.
03:27And there's a very large ecosystem in auto that has a multiplier effect.
03:30So that will be a very big positive for the industry.
03:33We talk about supply chains. We have to talk about rare earths.
03:36There's huge dependency on China.
03:38How do you see this playing out?
03:39And how do you diversify to ensure, I guess, stability?
03:44So various countries on the world are looking at this right now.
03:47The Indian government also has laid out a policy for rare earths.
03:51And we do expect manufacturers to come in for rare earths.
03:56We will obviously be customers there.
03:58And as that happens, that will help de-risk to some extent.
04:03As other countries put capacity on board as well, that will help de-risk it further.
04:08If you take a look at the conversations happening here in Davos,
04:11lots of conversations over geopolitics and the uncertainty of where it all might play out.
04:18How are you assessing the risks to your business?
04:22So let me first just comment on Davos,
04:25because Davos has always been a platform for dialogue.
04:29And this year's theme has been the spirit for dialogue.
04:32Not saying very much of that.
04:34I would actually disagree with that point, Haslinda,
04:37because in various meetings that have been in,
04:40and some closed door meetings, there have been open conversations.
04:45And there has been an attempt to understand different points of view.
04:50Solutions may take time, but at least as a platform,
04:54I really see Davos coming back in a very strong way to create that ability for folks to have that discussion.
05:01And that to me is a big positive.
05:04Moving then to your question on risks that we see.
05:07Significant.
05:08We're seeing those risks across the board.
05:11Frankly, over the last few years, we were expecting them to abate post-COVID.
05:16And then we felt we passed COVID.
05:18We are now looking forward to some peace, but that hasn't happened.
05:23And we see a lot of supply chain disruptions on a regular basis.
05:26You mentioned Raiders.
05:27That was obviously a big disruption.
05:28There are other minor ones that keep happening.
05:31The silver lining in all of this is that our teams have gotten stronger and more resilient.
05:36In some ways that COVID hadn't happened, we wouldn't be prepared for what's happening right now.
05:40And we just continue to keep alternate options.
05:44We've moved our mindset from just-in-time to just-in-case.
05:47And the just-in-case universe keeps expanding.
05:51Just-in-case is okay and is desirable until the bill comes along.
05:58It does come with a cost.
05:59How are you assessing and how are you balancing?
06:02And that's the challenge that our teams face, that you have to be careful about cost as well.
06:09But in many cases, the challenges in supply chain may not be as costly if you can find an alternate.
06:18And what I mean by that is for semiconductors, we face challenges with semiconductors or with chips that cost $2.
06:25In the cost of a car, that's really not very material.
06:30And in some cases, we paid 100 times that price.
06:33But that still wasn't that material overall.
06:36Similarly for permanent magnets, the cost of that isn't that significant.
06:41If you can't get it, it is very significant because you can't complete the car.
06:44So we're not as worried about cost.
06:46It's about creating alternatives.
06:48It's about having the design be ready for accepting alternatives because that's a tough part.
06:53If you have to redesign a particular component of the car and get approvals for it,
06:57it might take a year or two at times as well.
07:00So the design has to be ready for it.
07:02So these are the various things that are taking place right now.
07:04And yes, cost is impacted to some extent, but that doesn't really worry us a whole lot.
07:09We've been able to show very strong margins in this journey.
07:12The bigger challenge is, are we designed ready and is it available?
07:16India, of course, set to sign a trade deal with Europe, an FTA that's a long time in the making.
07:24Some say that concessions could be close to what we saw with the UK.
07:28How are you looking at the implications on competitiveness?
07:31We have always welcomed competition and we have gotten better because of competition.
07:37We've been written off as dead many times.
07:39In 2002 when Ford and Renault and others came in, we were written off as dead saying,
07:45we are not going to be able to compete against established and very reputed foreign car makers coming in.
07:53When the Koreans came in, we were written off as dead again.
07:56So that's happened multiple times in our journey.
07:58But every time competitions come in, it's made us stronger and better.
08:01And today we've got a great R&D center.
08:04We've got a fantastic team.
08:05And that gives us the confidence that actually it's good to have competition.
08:09It will make us better.
08:10And our objective is not to survive in India, but it is to really win across the world.
08:18And to win across the world, we have to be very, very good.
08:22So it's good to have a competition.
08:25We have four free trade agreements and it's something that's better for everyone.
08:32What we've seen the government do very well also is to ensure that ecosystems in India are also built with it.
08:39It's about expanding manufacturing in India, making India the manufacturing hub of the world
08:44because it's the lowest cost destination, because it's the best destination to have.
08:48And for that, ideally we would want to welcome all foreign car makers to India to make their cars in India.
08:55Higher competition for us, but that's a good thing.
08:57And that's a good thing for the Indian economy.
08:59So that's the path we really have to be on.
09:01And of course, on the other hand, that delay in the trade deal with the U.S.,
09:04you've said before that the implications for Mahindra is actually very minimal.
09:08Is that still the case five, six months on?
09:12So we do have assembly facilities in the U.S.
09:16From an overall percentage basis, it's a smaller percentage of our overall portfolio.
09:23And our overall portfolio is just going great guns right now, which results in a minimal impact.
09:29I know there are some industries in India that have a much greater impact.
09:32And therefore hopeful that the trade deal is signed.
09:36India and the U.S. have shared very strong relationships over a long period of time.
09:42And they've only been strengthened significantly over the past few years.
09:45So we just feel that it's something that we're optimistic about.
09:50And hopefully that will happen soon.
09:52Anisha, thank you so much for your time.
09:55As always.
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