Mahindra War Room 2019 Design to Disrupt

“THE TESLA OF RIDE-SHARING SERVICES”

LIVE CHALLENGE FROM ELECTRIC AUTOMOTIVE BUSINESS

“You either disrupt your own company, or someone else will!”

Chapter 1: Empathize

When you are 1.2 billion strong with 3.3 million sq. Km of land area, you are
bound to need mobility options. Though the 7th largest country in the world by
area, Road Development in India was filled with ironies and contrasts. A pioneer
in road development with road networks built hundreds if not thousands of years
ago, roads in British India were built more to facilitate troop movement than
people movement. At majority of Indian roads were predominantly single lane,
mostly unpaved and with no expressways and less than 200km of 4 lane
highways, when the British finally left India. The newly independent nation was
depleted economically and could not immediately rectify the situation, though
road networks were built at a frantic pace around the world, as the harbinger of
economic growth and development.

Chapter 2: Design & Ideate

It was going to take a while for the new governments to start focusing on road
development, and until then the country needed a rugged, robust mobility
solution. Mahindra realized this as a 3-year old start-up in 1948. A chance
meeting between the founder KC Mahindra with Mr. Delmar “Barney” Roos, the
creator of the iconic Willy’s Jeep, resulted in Mahindra winning the license to
manufacture and sell the Jeep in India. But Master Oogway would say, “There
are no accidents.”

Chapter 3: Prototype & Test

With just the essential engine and parts, Jeep was the perfect mobility solution
for Indian roads, when it launched in 1956. Rugged, low on maintenance and
well suited for the rough and tumble of Indian roads, Jeeps were used across the
country by civilians as well as the armed forces. Everything was well until 1973,
when the Organization of Petroleum Exporting Countries (OPEC) declared an oil
embargo, in response to the US support to Israel in the Yom Kippur war. Petrol

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prices increased 400% overnight across India, and the petrol-driven Jeep sales
virtually came to a standstill. But crises are but nature’s way of sifting leaders
from the also-rans. Not to be cowed down, Mahindra engineers swung to action
and worked relentlessly at adapting the successful diesel-driven tractor engines
to work with the Jeep. Accomplishing a near-impossible engineering feat in just
180 days, a new diesel-driven Jeep was ready to roll, reviving the fortunes of
Mahindra in the automotive industry. Jeep sales revived and Mahindra survived
in the toughest period of the automotive industry.

Chapter 4: Scale Profitably

Mahindra learnt from the long experience in manufacturing and marketing Jeeps,
developing more indigenous vehicles that were rugged, low-maintenance and
were almost ‘ideal’ for the Indian roads of the 80s and 90s. In 1993, the Armada
was launched, deriving from the Jeep platform, and the same was improvised
into the Bolero, launched in 2000s. Mahindra also tested the waters of electric
driven vehicles in India by launching the 3-wheeled Bijlee. But Mahindra did
something more fundamental that crystallized its position in the Indian
Automotive Industry. In the late 1990s, Mahindra set up a joint venture with Ford
Motor Company of USA called Mahindra Ford, and set up a large factory in the
outskirts of Chennai. Ford’s sedan platform was used to create the Ford Escort
car, which was sold across India. As the capacity of the plant was under-utilized,
Mahindra proposed to Ford to co-develop a world-class SUV designed
specifically for the Indian market, to be developed from scratch. Such a product
would bring the best of Mahindra’s iconic rugged and low-maintenance designs
but would also be the Utility Vehicle of the 2000s, and therefore be disruptive.
While Ford related to the product, they did not believe that a world-class SUV
could be developed at a budget of anything less than USD. 1 billion.

Left with no choice, Mahindra followed the call of their heart and took an
unprecedented risk of investing the entire Group’s 3-year profit after tax
amounting to USD. 150 million on a single project - the Mahindra Scorpio. And
the rest is history. Launched in 2001, Scorpio was a run-away success - the right
product at the right place and time. India was at the cusp of a long automotive
revolution, and Scorpio would be the one to herald it. Scorpios sold like hot cakes
and dominated the Indian SUV market for a whole decade, before being

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challenged by a plethora of global brands. In 2010, Mahindra acquired the

promoter’s stakes in Reva Electric car for an estimated INR. 330 crores to gain
access to critical electric vehicle technology, and subsequently launched the e2o
and eVerito electric cars. Over the years, Mahindra launched several more UVs
such as the Xylo, XUV and more recently, the KUV, Marazzo and Alturas G4.

Chapter 5: Design to Disrupt

The Automotive Industry is one of India’s critical industries, accounting for 45% of
the manufacturing GDP and 7.1% of National GDP, employing 19 million people
directly and indirectly. By 2020, over 6 million vehicles are estimated to be sold in
India. And such a crucial industry is in the threshold of a Digital Revolution. There
used to be a perception globally that the real answer to survival in the auto
industry was scale. The automobile has traditionally been sold as an aspirational
product, rather than just an object of mobility. The arrival of automotive
aggregators, and that too so rapidly over the last 10 years, has become a “Black
Swan Event” that has dramatically shattered all these beliefs and predictions.
Between 2007 and 2019, companies like Uber, Lyft, Ola and Didi Chuxing
attained rapid scale through venture investments, discouraging ownership and
promoting on-demand access to the automobile. As people got used to
aggregators, they are questioning if they should invest their precious life savings
into owning an automobile, or simply hail a cab through their smartphone when
they need one. Factors such as urban congestion, parking problems and traffic
snarls only seem to justify the case for sharing a ride rather than owning one.
Also, the underlying automotive technology is going through a drastic change
with the advent of the electric car, championed by Tesla.

Mahindra believes that in the new paradigm of the Automobile Industry, two
polarities will exist - the Automobile as an Object of Desire, and the Automobile
as an Object of Mobility. Having been hugely successful in the Object of Desire
space, Mahindra now seeks to de-risk by developing the the Object of Mobility or
RideSharing space offering as well.

In May 2017, Mahindra piloted an Electric Mass Mobility program in collaboration

with Ola, where over 200 electric vehicles were deployed as Ola Cabs, with a
charging infrastructure of 50 points across 4 strategic locations in Nagpur. This

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experiment was watched with keen interest across the automobile industry
worldwide. The Minister of Road Transport, Highways & Shipping Mr. Nitin
Gadkari, and the Chief Minister of Maharashtra, Mr. Devendra Fadnavis flagged
of the event and hailed it as the harbinger of transformational change across
India. The Maharashtra Government has waived the VAT, Road Tax and
Registration of all electric vehicles in the state, in order to hasten the adoption.

In the Ride Sharing space, 3 types of business models exist - the RadioCab
model adopted by companies like Ola, the Corporate Lease Model, adopted by
companies like Lithium, and the Self Driving Rental Model, adopted by
companies like Zoomcar. Can Mahindra ride a new wave of Electric Mobility in
India, by putting together a Ride Sharing Business Model using only Electric
Cars? This has been a source of curiosity since 2016.

Today, Ride Sharing is commoditized - people generally are not aware of the
make or type of car they are going in, and are merely focused on getting from
Point A to Point B. While there is added convenience in terms of booking online,
paying online, knowing the precise location of the driver etc., it often gives a poor
commute experience due to gaps in driver quality, vehicle quality and other
factors, in spite of the service provider certifying with multiple stars! Also, in ride
sharing scenarios there is often privacy. And above all, we are polluting the
environment all along as almost all ride sharing car options are IC engine based.

What if you get a ride share that has extra cushioned seats, with just 3 seated in
a sedan, with private screens? And what if it has an air purifier to protect you
from the harsh city pollution? What about widescreen entertainment? And above
all, what if it boosts your social consciousness by a completely non-polluting,
silent electric ride? All this, over and above the usual comforts of ride sharing
apps. Obviously, the customer experience described above is disruptive - it
completely transforms the way ride sharing is today - a Tesla of ridesharing if you
will. Making commutes more human-centred, and more productive. Welcome to
Glyd Ride Sharing by Mahindra.

Would such a unique and differentiated experience breed customer loyalty?

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Mahindra launched the Glyd pilot in 2019 in Mumbai, from Kandivali to Bandra-
Kurla Complex; Andheri to Lower Parel, as a shared commute targeted at
premium office goers. Glyd commuters share a ride, but experience business
class luxury. A mobility service that’s run entirely on electric cars, Glyd aims to
appeal to the socially conscious, and promises “Human Centered” and
“Productive Commutes”. A Glyd car has individual cushioned seats inside,
providing ample space for each traveller. With only 3 seats, one in the front and
two in the back, and privacy screens in between each, Glyd is specifically
designed to allow everyone to find their own personal space. Glyd brings its own
Widescreen Media Tabs with not just the usual entertainment, but even self-
improvement video courses. And with an electric engine, the ride is incomparably
silent. The air purifier protects one against the polluted urban air. Silence, space,
and a productive environment. All that one ever wanted from their daily commute
is built into Glyd.

Design a strategy to scale the Glyd pilot into a full-fledged new ride-sharing
business that is disruptive and differentiated through superior customer
experience, given that it has to be electric and it has to be four-wheeler
based.

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