Mahindra Budget Reaction - Detailed Insights | V3Cars
In this article, we’ll present Mahindra’s reaction to the 2023 budget. Based on the announcements from the finance minister and the statement from the carmaker, we’ll try to understand how the 2023 budget impacts Mahindra in the short and long term.
Here’s what Mr. Anish Shah, MD & CEO, Mahindra Group, said about the Budget 2023:
“This is an outstanding budget as it is disciplined, growth-oriented, inclusive and sustainable. The Finance Minister has done a commendable job by tabling a budget that is big on consistency and driven majorly by capex. The steep increase in capex, to the tune of Rs 10 lakh crore, will ensure the continuum of cyclical recovery. Capex spending is good because it has a higher multiplier effect: every rupee spent on capex has a multiplier of Rs 3 as compared to just about Rs 0.9 for revenue expenditure. That apart, higher capex also creates jobs in the hinterland. The focus on core infrastructure, including increased funding for railways and clean energy, as well as the government's ambitious plans for the agricultural sector, will help to improve rural incomes. Above all, it is encouraging to see the government setting the pace for climate action by announcing a "green budget" that will pave the way for a greener, cleaner planet.”
V3Cars Insights - Higher Capex
Mahindra strongly supported the government's decision to drastically increase the capex in the 2023 budget. According to Anish Shah, this will help maintain healthy demand across the board while spurring demand in tier 3 and tier 4 cities. The focus on infrastructure spending and improving connectivity with rural areas will help with higher incomes in these regions
Green Budget, Clean Energy
Mahindra also highlighted the government’s focus on clean energy in the 2023 budget and their effort to promote cleaner alternative fuels. Mahindra are also riding the green mobility wave with the new XUV400 electric SUV. They’re also showcasing their born electric range of SUVs in India for the first time on February 10, 2023.
Missing In Reaction - Hydrogen, Bio Fuels, Battery Production
While Mahindra openly welcomed the green energy initiatives in the 2023 budget, they didn’t explicitly highlight the government’s initiatives towards promoting hydrogen, bio fuels and the push for local battery manufacturing.
Mahindra have previously hinted that they will use blade batteries from BYD. Moreover, Mahindra have also previously highlighted that they intend to use made-in-India batteries. But BYD don’t have a battery manufacturing plant in India right now. Perhaps, the latest incentives in the budget will give BYD enough reasons to set up a battery manufacturing plant in India.
In terms of hydrogen propulsion, Tata seem to have an edge as they have already secured a customer for their hydrogen fuel-cell trucks. Meanwhile, Hyundai and Toyota also have fuel cell vehicles in their international portfolio but no concrete plan to bring them to India. Mahindra haven’t even shown interest in diversifying their portfolio with alternative fuels like hydrogen or bio fuels. Toyota, Maruti Suzuki and Tata have confirmed their interest in making flex fuel cars while only Maruti Suzuki have taken steps to make bio-CNG cars. You can read more about these topics in the following stories: