Two new product unveilings dominated headlines in the automotive space this week, but a board meeting at one of India’s oldest powerhouses superseded everything else.
The changes at Mahindra come at a very critical juncture and will test the aptitude of the incoming talent. We take a look at these challenges and other important news in this edition of the weekly news wrap.
Carmakers hikes discounts to lure buyers
As the year draws to a close, car companies and dealers are making last-ditch efforts to get rid stock by offering discounts higher than ever seen before.
Energica to enter India in 2020
Italian electric superbike maker Energica Motor Company is looking to enter India to market its high-end battery-powered motorcycles, a top company official said.
One bike has a top speed of 240 km/hour and will create a new benchmark in India’s electric vehicle (EV) space. Headquartered in Modena, Energica is the ace supplier of race bikes to each of the 18 riders (11 teams) participating in the FIM MotoE World Cup.
Volkswagen to launch four new SUVs in India
German auto heavyweight Volkswagen will roll-out four sports utility vehicles (SUVs) in India over two years after launching a new brand connect to coincide with the biggest turnaround effort it has launched in its 11-year domestic history.
The maker of Polo and Vento will kick-start launch proceedings in 2021 with the introduction of an all-new mid-size SUV in the segment dominated by the twin Korean sisters: Kia Seltos and Hyundai Creta.
Tata Motors showcases Nexon EV
Auto major Tata Motors on December 19 unveiled its first electric SUV, the Nexon EV that will be commercially launched within weeks.
The electric version, however, gets an exclusive colour option called electric teal with light blue highlights around the car. in terms of dimensions, the EV is identical to the standard Nexon, but it does get styling differentiators to make it stand out.
Hyundai unveils Aura sedan
Hyundai Motor India, the country’s second-largest carmaker on December 19 unveiled its compact sedan Aura, tipped as a successor to Xcent besides being a challenger to segment leader Maruti Suzuki Dzire.
Commercial launch and price details of the Aura will be shared in the coming weeks when the sedan hits showrooms. Aura will be competing against Honda Amaze, Tata Tigor and Tata Zest besides the Dzire
Mahindra prepares a succession plan
The board of Mahindra & Mahindra (M&M) has approved the transition of Anand Mahindra’s role from chairman to non-executive chairman, the auto major said in a statement. Pawan Goenka has been re-designated as the managing director and CEO up to November 11, 2020.
As Non-Executive Chairman, Mahindra will serve as a mentor and sounding board for the managing director, especially in the areas of strategic planning, risk mitigation and external interface, the statement said.
There will be no change in any reporting relationships as a result of Goenka’s re-designation. He will retire on April 1, 2021, and will continue to retain direct responsibility of Ssangyong Motor Company as Chairman of its Board till his retirement date, the statement further added.
Anish Shah will join the Mahindra board as deputy managing director and Group CFO. On April 2, 2021, he will be appointed as Managing Director and CEO of the company.
This is the biggest reshuffle at the top level at M&M since 2016 when Goenka was appointed MD and additional appointments were made at president level responsible for auto, farm equipment, power gensets and international business verticles.
The passing on of the baton coincides with M&M’s automotive segment battling the perfect storm. Rising competition from new entrants has eroded its market share the worst levels ever. M&M’s utility vehicle market share slumped to 25 percent from a peak of 55 percent clocked just six years ago.
New players like Kia and MG Motor rolled out technology-loaded, stylish SUVs in the very category that M&M called its backyard a few years ago. This is even as age-old rivals like Maruti Suzuki, Hyundai and Tata Motors upped their ante. The temperature will rise further when Volkswagen, Skoda, Renault, Honda and newcomer Citroen launch nearly a dozen-odd SUVs in the next three years.
In the commercial vehicle (CV) segment rival, Tata Motors and Ashok Leyland are gearing up recoupe lost ground while Volvo Eicher and Daimler bank on their technology strengths under the new emission standard of Bharat Stage VI (BS-VI), which they have been selling in Europe.
The high cost of ownership under BS-VI will make two-wheelers a slightly more difficult proposition. Further, with M&M exiting the mass market two-wheeler segment to focus solely on exotic brands like Jawa and Yezdi there will be challenges to keep them both relevant.
Royal Enfield, which Jawa competes against, is claimed to be witnessing some level of brand fatigue in line with similar issues seen at Harley-Davidson.
Ssangyong Motor Company, the Korean SUV-specialist that M&M bought nearly a decade ago is yet to turn profitable. Back home M&M has assumed majority ownership of a new company which holds business assets of Ford. The company will have to integrate vehicle development programs to achieve maximum operational synergies.
Tractors, where M&M has a share of over 40 percent, may yet again prove to be the white knight for it. However, the fortunes in this segment are directly impacted by government support, climate change and financing activity.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
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