 "Pawan Kumar Goenka")
Mahindra & Mahindra has had a challenging year so far, especially due to the temporary ban on large diesel vehicles in the national capital region. Pawan Goenka, M&M’s executive director, tells Ajay Modi that petrol vehicles will be an important focus area and the company is ready to bring in smaller engines if larger engines are perceived to be more polluting. Edited excerpts
How easy was it to develop a 1.99-litre diesel engine and bring it to comply with the ban imposed by Supreme Court?
The 1.99-litre engine was a happy coincidence. It is
not that we started developing the engine because of the ban. The engine was on the drawing board for a year-and-a-half. The development was not specifically for India, but for global markets.
Will that be used nationally or only for the NCR?
Right now it is only for the NCR. We will wait to see how customers respond. If they are happy with its efficiency and are indifferent to the engine size, we will make it common. The legal requirement forces us to sell it only in NCR, but if customers want 1.99 litre everywhere, we will do it.
Will you rate the current year as one of the most challenging in recent times?
Businesses are always challenging. There is always some challenge or the other. We only keep forgetting past challenges when there is a new one.
The challenges in front of us are coming from various fronts — regulatory, legal, competitive, safety. The tractor business is faced with a slowdown in the rural market. In two-wheelers, we are struggling to ramp up to the volumes we want. The electric vehicle has not reached a level we would want it to.
So, there are multiple challenges. Mahindra will tackle each of these. The two things that we have done in last one month — launch the KUV100 and the 1.99 diesel engine — show that we will be able to take care of challenges that come our way.
Are you reviewing your strategies?
Definitely. We are looking at the petrol portfolio more seriously. Not that we had not planned on petrol. It was always in the works and that is how the petrol KUV 100 came about. But we will probably do it in more vehicles now. What is yet to be seen is how our customers react to petrol offerings in SUVs. Smaller vehicles like the KUV100 will have a good mix of petrol and diesel. But for the larger ones like the XUV500, whether the customer accepts it is yet to be seen.
The second change is electric vehicles. They are becoming more relevant. The FAME scheme has given them some push. We expect electric to become more mainstream.
The third change is that the BSVI norms, which would have come in 2024, have been advanced by four years. A lot of resources will have to be put in to meet the norms.
For your larger SUVs, will you look at a specific engine capacity?
Engine capacity is not a determinant of pollution. There is no correlation between engine size and affluence. Our biggest engine (2.5 litres) goes into our least expensive vehicle, the Bolero. Emission norms are based on per kilometre of driving. I hope the Supreme Court will revisit the view that a bigger engine means more emission. We will be keeping ourselves flexible. We can launch 2 litre engines across the board or we can do a mix of 2 litre and 2.2 litre. For the bigger vehicles we will look to see if we can go below 2 litres if the perception sets in that smaller engines mean less emission.
Does diesel technology need an image makeover?
Everything has to be looked at holistically. There is nothing that is all good or all bad. If we constantly keep talking about the negative side, that perception gets built up.
Diesel’s biggest virtue is that it has lower CO2. To meet the COP21 commitments that India has made, the biggest enabler we have is more use of diesel. One thing that is bad in diesel is PM emission compared to petrol. Nobody can take it away. I can reduce PM emission when we move to BS-VI, but other pollutants like CO is good in diesel.
Beijing has hardly any diesel vehicles but it still has high pollution. It has been proven again and again that the high PM in Delhi is not only due to diesel vehicles. The fact that diesel is not a clean vehicle is all because of focus on one aspect, the PM2.5 without looking at the contribution of passenger vehicles to PM2.5.
We need to talk more about the virtues of diesel. But if I do that right now, nobody is going to listen. We have to wait for the situation to change.
How easy was it to develop a 1.99-litre diesel engine and bring it to comply with the ban imposed by Supreme Court?
The 1.99-litre engine was a happy coincidence. It is
not that we started developing the engine because of the ban. The engine was on the drawing board for a year-and-a-half. The development was not specifically for India, but for global markets.
Will that be used nationally or only for the NCR?
Right now it is only for the NCR. We will wait to see how customers respond. If they are happy with its efficiency and are indifferent to the engine size, we will make it common. The legal requirement forces us to sell it only in NCR, but if customers want 1.99 litre everywhere, we will do it.
Will you rate the current year as one of the most challenging in recent times?
Businesses are always challenging. There is always some challenge or the other. We only keep forgetting past challenges when there is a new one.
The challenges in front of us are coming from various fronts — regulatory, legal, competitive, safety. The tractor business is faced with a slowdown in the rural market. In two-wheelers, we are struggling to ramp up to the volumes we want. The electric vehicle has not reached a level we would want it to.
So, there are multiple challenges. Mahindra will tackle each of these. The two things that we have done in last one month — launch the KUV100 and the 1.99 diesel engine — show that we will be able to take care of challenges that come our way.
Are you reviewing your strategies?
Definitely. We are looking at the petrol portfolio more seriously. Not that we had not planned on petrol. It was always in the works and that is how the petrol KUV 100 came about. But we will probably do it in more vehicles now. What is yet to be seen is how our customers react to petrol offerings in SUVs. Smaller vehicles like the KUV100 will have a good mix of petrol and diesel. But for the larger ones like the XUV500, whether the customer accepts it is yet to be seen.
The second change is electric vehicles. They are becoming more relevant. The FAME scheme has given them some push. We expect electric to become more mainstream.
The third change is that the BSVI norms, which would have come in 2024, have been advanced by four years. A lot of resources will have to be put in to meet the norms.
For your larger SUVs, will you look at a specific engine capacity?
Engine capacity is not a determinant of pollution. There is no correlation between engine size and affluence. Our biggest engine (2.5 litres) goes into our least expensive vehicle, the Bolero. Emission norms are based on per kilometre of driving. I hope the Supreme Court will revisit the view that a bigger engine means more emission. We will be keeping ourselves flexible. We can launch 2 litre engines across the board or we can do a mix of 2 litre and 2.2 litre. For the bigger vehicles we will look to see if we can go below 2 litres if the perception sets in that smaller engines mean less emission.
Does diesel technology need an image makeover?
Everything has to be looked at holistically. There is nothing that is all good or all bad. If we constantly keep talking about the negative side, that perception gets built up.
Diesel’s biggest virtue is that it has lower CO2. To meet the COP21 commitments that India has made, the biggest enabler we have is more use of diesel. One thing that is bad in diesel is PM emission compared to petrol. Nobody can take it away. I can reduce PM emission when we move to BS-VI, but other pollutants like CO is good in diesel.
Beijing has hardly any diesel vehicles but it still has high pollution. It has been proven again and again that the high PM in Delhi is not only due to diesel vehicles. The fact that diesel is not a clean vehicle is all because of focus on one aspect, the PM2.5 without looking at the contribution of passenger vehicles to PM2.5.
We need to talk more about the virtues of diesel. But if I do that right now, nobody is going to listen. We have to wait for the situation to change.
