A firm believer in last-mile solutions, Mahindra Group Chairman Anand Mahindra told ET Now that the group is positioning the ATOM and the UDO as concepts of future mobility in cities. Edited excerpts:
Nayantara Rai: You love Simcity. You started off by studying architecture. You are developing world cities. Are you going to look at more of such townships or you think two are enough keeping you busy or will it just be like pockets of affordable housing buildings or however you want to do it?
Anand Mahindra: When you do something that large, you have to be a little opportunistic. You cannot predict when you are going to get 3,000 vehicles. It happens sometimes. It does not happen. So, it is very difficult to make a business plan and say in the next quarter I am going to do so many square feet and so on or it depends on the state government. I mean if you look at Mahindra World City Jaipur, the chief minister at that time met me at Davos and she said she was talking to Mohandas Pai and was telling him that Infosys should come to Jaipur. I was going up the other escalator so they waived to me and Mohandas said get Anand to put up a world city like he has done in Chennai and Jaipur and we will come… that is how it happened. So, I am just saying we went on and said okay we look at Jaipur. So, you need a proactive…
Nayantara Rai: So, did anything like that happen at this year’s Davos?
Anand Mahindra: Unfortunately, no. I did not go up the escalator. I should have gone, that should have been my business location, but the fact is who knows you need a proactive government, you need a pocket of land, you need proactive policies. So, if we get a similar set of auspicious circumstances for us to put up another giant city, we will do that. In the meantime, will we do townships? Yes, because we think that all the lessons we have learnt in building complex communities apply even to smaller townships.
Nayantara Rai: I think the lesson which has also been learnt is that you have to have a rural focus. Your group already has a huge rural focus. This government has… if you look at Budget 2018, it has had a huge rural focus. So, if you focus on affordable housing in not just tier III towns but below that as well, could that be a possibility? It will go in so well with maybe your tractor business or if you have a rural financing company.
Anand Mahindra: I love synergies. That is my job to see synergies between our various businesses and sectors. I see opportunities coming in for our sectors, but you can carry that analogy a little too far and you have to be careful about that. So, is there really a link between how we sell tractors and whether we can do rural townships, I am not sure. Is there a brand synergy? Yes. If people have relied on us for farm solutions, have found our products and services something like their friends over the years, then will they trust somebody who is developing homes for them or lending them finance. Yes, we find that brand synergy certainly carrying over when we go into rural pockets and offer housing finance or even housing. So, yes I think there is a brand synergy, but one has to be a little careful not to carry that too far and you have to be very very realistic about what the synergies are.
Nayantara Rai: I want to talk you to about quality of life. Pollution is a really big problem today. I mean I come from New Delhi, so for me it is particularly bad. But when we talk about quality of life, that is where the emphasis on electric vehicles as well comes. You talked about metros. Can your group play a huge role on that when it comes to public transport and electric vehicles as well, are you looking at that?
Anand Mahindra: Of course, I would hope so. I would hope we are doing that, that is the bet we took starting with electrification. Shirish Sankhe of McKinsey… they are the thought leadership and knowledge partners they call themselves here in this conference. He talked about three paradigm shifts and the first one he did talk about was about urban mobility and electrification, which is already here as he said. But why is it already here because of Reva and we have ramped up Reva? So, we like to be pioneers in that space. We intend to continue to be pioneers in that space. In the public domain, we are investing in people who are going to be in the shared mobility space. We are looking at Zoomcar, for example. We have invested in the shared mobility space in San Francisco. We have invested in Scoot which is running a whole two wheeler scooter fleet in San Francisco based on Mahindra GenZe scooters. So, we are going to do this not just here but around the world frankly and yes, we hope to be pioneers and we hope to be part of what I call a complete solution.
Nayantara Rai: You had once said life would become a living hell if our cities get more congested. Even though you are big boss of an auto company, it seemed quite ironic at that point. But so very true and that led to a lot of speculation that you are perhaps looking at cap aggregation.
Anand Mahindra: Well, yes I did say that. And not too long ago just before the auto expo. Because yes, I come to Mumbai and you and I both know viscerally. We know that if things get more congested and more cars sell without a fundamental shift in how you plan mobility and cities, yes they will be a living hell. I call a spade a spade. Does that mean I am harming my business? No. In that same article which of course is not looked at that closely, I said intercity transport and traffic, recreational transport is going to explode in India, it is going to boom. As affluence grows, people will buy vehicles for travelling between cities and their lifestyle, recreation and expression of their own individual personality. What do I think they will buy? SUVs. So, I think our business is alive and well, but in cities I have to be realistic. I have a family. I have got a grandchild now. I have to worry about how they are going to live.
Nayantara Rai: You once said your daughters decided not to buy cars.
Anand Mahindra: They do not buy. They do know how to drive, frankly. They only use Ubers where they live. So, the question is one has to recognise that reality is changing for urban living and we want to be part of that new solution, which is why we are in electrification. We are in two-wheeler electrics. We are in last mile solutions. If you went to our stall in the auto expo, you would have seen that the two products we came up with are the ATOM and the UDO. These are our concepts of what future mobility in cities will be like. So, I want to make sure that Mahindra has a business interest in ensuring that life would not be a living hell.
Nayantara Rai: So, you are going look at cab aggregation or not, there was some speculation you look at electric vehicles…
Anand Mahindra: Absolutely. We look at… I just told you we have invested in Zoomcar, that is for the self driven. We are willing to look at ride sharing. We are willing to look at bespoke solutions. I think Pawan (Goenka) also has said on record that we are examining our own corporate mobility solutions. Mahindra Logistics is already in personal transport. We provide fleets of buses to all the BPOs in India. We are one of the leading providers. Not many people know that.
Nayantara Rai: Would you ever look at public transport in the form of metros or anything like that?
Anand Mahindra: No, to be very honest if you look anywhere around the world, public transport as it is defined today has to be subsidised by governments, by tax payers that is part of an externality as economists call them. Governments have an obligation to provide. Now, if the concept of public transport changes and once again the McKinsey partner said it today that you will get autonomous vehicles bespoke autonomous vehicles, that will then blur the line between what is public transport and personal transport. When that line blurs, if there is a personal autonomous vehicle that may have to be part of public transport, yes Mahindra will be there.
Nayantara Rai: Do you think it was a missed opportunity that we did not see… I know you do not like incentives, but a lot of your industry peers like incentives. A missed opportunity that India has this dream of electrification when it comes to vehicles, we have to advance a timeline of the BS-VI as well and no tax sops to the auto industry.
Anand Mahindra: I hate that word sops, you are right. I hate the idea of businessmen hanging at the fringes of the Budget speech waiting for manor to drop from heaven of budget sops. I think Indian industry is matured well beyond that. We take the blowers as they come. There are obviously cycles when the government will provide the right policy directions to us. I am very pleased with just the very fact that they are creating an aspiration for electrification. For example, there is a policy now in place.