Anand Mahindra, Chairman of Mahindra & Mahindra Ltd, has urged the automobile industry to significantly increase private investment to harness India's demographic dividend and drive economic growth. In the company’s annual report, Mahindra emphasized the critical need for private capital to stimulate job creation, growth, and market demand amid favorable external conditions.

“There is a good supply of labour. The need for jobs for young people, our demographic dividend, is high. Externally, too, conditions are working in our favour. It’s time to seize the day”, Mahindra stated. He pointed out that the industry has an opportunity to capitalize on the current favorable economic landscape by enhancing private investment, which historically has been a vital growth driver. “I would argue that the most important thing the industry can do at this critical juncture is to increase private investment. Private capital investment is the key to capitalising on this opportunity. It’s a key driver of growth, jobs, and demand”.

Mahindra highlighted a concerning decline in private investment as a percentage of GDP, which has fallen since 2011-12 after previously rising from around 10% to approximately 27% following the economic reforms of the 1990s. “We need to remedy that situation,” he said, calling for a shift in mindset away from the risk aversion that has prevailed, particularly in the aftermath of the COVID-19 pandemic. “The problem is not one of resources rather, it is one of mindset. Particularly after Covid, Indian companies have become increasingly risk averse, sticking to the tried and true, rather than blazing new trails”.

Mahindra acknowledged the understandable caution among businesses but urged the industry to overcome its fear of failure. “When opportunity beckons, when private industry can make a significant difference, it is time to set aside our fear of failure and take a leap of faith and self-belief”, he urged.

Despite challenges, Mahindra & Mahindra Ltd reported a robust increase in volumes, with an 18.1% rise in total automotive volume in FY24. The company also holds a substantial market share, commanding 20.4% in the SUV segment and 41.6% in farm equipment.

Mahindra also outlined the company's ambitious investment plans, announcing Rs 37,000 crore to be allocated across its auto, farm, and services businesses over the next three fiscal years (FY25, FY26, and FY27). “These investments will, to a large extent, go towards building capacity, with a pipeline of 26 new models/facelifts in the next 5 years”, Mahindra revealed. Additionally, Mahindra Finance’s loan book exceeded one lakh crore, marking a 24% increase over the previous year. The company’s Growth Gems, including Tech Mahindra and other services businesses, contributed nearly Rs 7,000 crore to net cash generation over FY22-FY24.

As Mahindra & Mahindra Ltd continues to invest in expanding its capacity and innovating new models, Mahindra’s call to action for increased private investment is expected to resonate across the automobile industry, potentially spurring broader economic benefits.