'Sweating & slaving': Anand Mahindra responds to Elon Musk on car production
Mahindra Group Chairman Anand Mahindra agrees with Tesla CEO Elon Musk that car production is a difficult ask and that having a positive cash flow is an even tougher ask, but with a view of his own as well. "And we’ve been doing that for decades now. Still sweating & slaving away at it. It’s our way of life…" Anand Mahindra added.
Musk had highlighted how larger automakers have low or even zero true margins when selling vehicles. “Most of their profit is selling replacement parts to their fleet, of which 70% to 80% are past warranty," he had said. “New car companies lack this advantage. Also lack sales & service infrastructure." The Tesla CEO had made the comment in reply to a report which was on British company Dyson's failed efforts at having an electric car of its own.
Mahindra, on his part, seemed to agree but also highlighted how the Indian car maker has been continuing to push forth through the challenges.
Mahindra and Mahindra reported a 17% rise in passenger vehicle sales in the domestic market in August vis-a-vis figures from the same month in 2020. The company recently launched the XUV700 which has emerged as its most promising vehicle, one that boasts of a number of luxury features as well as a capable drive performance. Mahindra cars have also been faring well in safety tests.
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But the path ahead remains a challenge because of a global shortage in crucial parts. Mahindra has already announced a cut in production for this month and while manufacturing of XUV700 is likely to remain unaffected, supply of other models may indeed take a hit. And this isn't just a problem for Mahindra but most OEMs - both in India and the world over.
Auto giants like Volkswagen, BMW and Daimler, in fact, predict the chip crisis plague to persist for years and could be the single biggest cause of concern for the industry at large in the foreseeable future.