Mahindra North America right sizes operation, Tech Centre to focus on new generation EV platform development

MUMBAI: Even as it takes hard calls on capital allocation, Mahindra & Mahindra, India's leading utility vehicle maker is 'doubling down' on electric vehicles.
Having ceded ground to homegrown rival Tata Motors, Mahindra & Mahindra has started developing a grounds up electric vehicle architecture at its North America R&D centre in Detroit to cater to the emerging wave of electric vehicles for Indian and the global market, even as it takes a hard call on right sizing operation.

Not only will the company be investing a sizable part of Rs 1500 crore it would have invested into the Ford joint venture into electric vehicles but also aspire to be a full system supplier to the other vehicle makers.

In a statement Mahindra Spokesperson told ET, "The Detroit centre will continue the future-ready work on new, ‘Born Electric platforms and is preparing for the launch of the New Roxor 2021, for which we continue to retain as well as bring in new and relevant skilled talent."

Deciding to not participate in the US Postal Service bidding process and with the critical chunk of new generation Scorpio platform Z101 work completed in North America, Mahindra North America has been evaluating options for making the organisation leaner and optimising performance and productivity.

The spokesperson said, given the current circumstances, Mahindra North America has combined some of the job roles and has taken the most difficult decision to reduce the resultant redundant job roles. The Group however will stay firm on implementing capital allocation norms, with a sharp focus on financial returns, driving growth and continued improvement in international subsidiaries.

"Mahindra remains wholly committed to the U.S. market and to building a portfolio of tough and durable commercial vehicles to meet the needs of a rapidly evolving economy," clarified the spokesperson.

Reuters on Thursday reported Mahindra and Mahindra will let go of more than half of the workforce at Mahindra Automotive North America (MANA), citing unnamed sources.

Since last year, the company has pulled out of bidding for a contract to build trucks for US Postal Services, closed its electric scooter business in the country called GenZe, and walked out of a joint venture deal with Ford Motor as part of its drive to conserve capital. It is also in talks to sell majority stake in its South Korean subsidiary SsangYong Motor.

MANA was caught in a prolonged legal tussle with Fiat Chrysler Automobiles (FCA) over alleged intellectual property infringement, which led to a court ruling against Mahindra selling its Roxor off road vehicle.

“This forced us to halt production and furlough our manufacturing team and some additional people across several functions, including the Roxor sales team,” the company told Reuters in a statement.

However, last month, Mahindra won a favourable ruling at the International Trade Commission (ITC), which allows it to sell post-2020 Roxor models in the USA.