Mahindra to pursue engineering actions to address rare earth magnet crisis: Group CFO

Mahindra plans to manage rare earth magnet supplies through alternative sourcing channels for the next nine months and will pursue engineering efforts to address the shortage of the critical raw material amid a growing product portfolio. This comes after the auto industry has been facing a crunch in the rare earth magnet supply, which is one of the key raw materials for automotive production, used in both electric vehicles as well as internal combustion engine-propelled vehicles.

The imposition of export restrictions by China on key rare earth magnets has resulted in supply chain bottlenecks, impacting multiple sectors, including the auto industry. The rare earth magnets are essential components across sectors like automobiles and renewable energy.

PTI has reported that Mahindra has taken steps to build inventory through alternative sources to take care of the problem. "Basis, all the actions we have taken, FY26 is more or less managed. We have to now work on some medium and long-term actions," said Mahindra & Mahindra (M&M) Group Chief Financial Officer Amarjyoti Barua. He also added that this strategy has panned out well for the company so far, and it does not foresee any major risk for the next nine months. "But considering the growth plans we have, we have to think about a much bigger play than what the tactical plays we have done, and that is going to require a lot more engineering effort," Barua further said, while adding that Mahindra's engineers are working on various methods to work out a solution.

Interestingly, Mahindra CFO's comment comes in similar lines to Maruti Suzuki. Last week, Maruti Suzuki stated that its engineers are working to mitigate the rare earth magnet shortage, and there has been no impact on its production so far. Among others, Hyundai Motor India has also stated that it is not facing any production issues due to the shortage of rare earth magnets.

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