Indian business tycoon seemed to have agreed with Musk’s opinion on carmakers facing challenges for positive cash flow, but also pointed out how the automaker is trying to sail through the obstacles.
New Delhi: Mahindra Group Chairman Anand Mahindra, who remains active on social media responded to Tesla CEO Elon Musk’s view on car production and agreed that it’s a difficult task and that having a positive cash flow is even tougher. He also added a punch to the tweet saying, “And we’ve been doing that for decades now. Still sweating & slaving away at it.
“It’s our way of life…” Anand Mahindra added.
Elon Musk on Tuesday tweeted in response to a story related to the British tech company Dyson’s failed attempt at building an electric car saying that the large legacy automakers sell their cars at low to zero true margins.
“Most of their profit is selling replacement parts to their fleet, of which 70% to 80% are past warranty,” Musk said. Musk also gives analogy of razors and blades to support his views. “New car companies lack this advantage. Also lack sales & service infrastructure,” Musk adds.
Indian business tycoon seemed to have agreed with Musk’s opinion, but also pointed out how the automaker is trying to sail through these challenges. Mahindra and Mahindra reported a 17 per cent rise in passenger vehicle sales in the domestic market in August compared to last year. 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.
However, there are challenges for automakers because of a global shortage in crucial parts. Mahindra also announced a cut in production for this month with manufacturing of XUV700 may remain unaffected, supply of other models are likely to suffer. This issue is not limited to Mahindra but most OEMs – both in India and the world over face this issue.
