The Mahindra group, one of India’s largest auto firms, expects a major shift in the way vehicles will be made, due to the large threat from e-commerce players such as Ola and Uber who have made mobility easier.
Group executive director and the brains behind the Mahindras’ success Pawan Goenka, said owning cars will soon be relegated to an option as taxi aggregators will start making inroads into a large part of the car-owning segment. This has prompted Mahindra to work on changing the design of its future cars to serve individual buyers and transport players.
“The biggest problem that we see now for the auto industry, in e-commerce, is that if taxi aggregators make mobility very convenient, to go from point A to point B, then many people may not want to own a car,” said Goenka, largely credited with popularizing the Scorpio and kick-starting the current rush for SUVs. “That’s a big challenge. But, obviously when such aggregators are transporting people, they need cars and that’s an opportunity. How do we make cars for such aggregators and for an individual customer. Their needs are not the same. That’s the challenge. If we can convert the challenge, then we can convert the threat into an opportunity. If we can’t get over the challenge, then the threat remains a threat,” he told HT in an hour long interaction at the company’s manufacturing plant at Kandivali, Mumbai.
Rising incomes and improved connectivity has spread usage of the Internet in India, in turn leading to mobile applications, or apps, such as ride-hailing ones. This is likely to affect auto sales volumes as it has in the US in large cities grappling with traffic and parking problems.
Goenka said that the trend is evident in their current blue-prints. “Its already impacting our decision making…the way we design our vehicles. We have to design in a way that is right in a way for that particular segment, and we have to look at vehicle design to answer, why would you want to buy the vehicle, if using a taxi is cheaper and less troublesome for you? How do I get you to buy a vehicle? So making, cars an object of desire rather than an object of mobility is the paradigm shift that we have to do.”
But the Mumbai-based company will not have different platforms for two requirements. The manufacturing will be tweaked so that there are two offerings where cars are fine-tuned for personal ownership versus aggregator ownership.
Mahindra will get to test this customer feedback when it launches the KUV100, its first passenger car in 2016, a mini-SUV. “We have to see how customers perceive this product…as not something that is optional but as something ‘I want to have,’” said Goenka.