2.

Analyze the Indian passenger car industry with a specific focus on electric vehicles
using Porter’s five forces model and assess how the industry characteristics would impact
the strategies of MEML.

 The threat of new entrants

Mahindra Electric Mobility Limited (MEML) will face the low threat of new
entrants if the existing regulatory standards impose challenges to new firms that
are interested in entering into the market. In this case, the new firms entering into
the market have to make sure that they follow the EV6 compatible engine
standards.

Many firms such as Hero Future Energies Limited, Ravin Group, Sun Mobility,
and Bharat Heavy Electricals Limited were venturing into the domain of battery
manufacturing for EVs. MEML can lower the threat of these entrants by
providing the Lithium-ion batteries at a lower price than these firms. This in turn
will create high psychological switching cost for customers and the new entrants
may find it hard to get the customer base.

 The threat of substitute products

MEML faced competition primarily from Tata Motors Limited, Maruti Suzuki
India Limited and Hyundai Motor India Limited. Among these Maruti Suzuki
India Limited posed a threat of substitute product for MEML. Its EVs were
expected to have an output in excess of 35 kWh and were likely to be priced at 1.1
million. On the other hand, EVs of MSIL had the same output but they were
priced lower than MEML EVs with their price less than 1million. Customers of
EVs could possibly switch to Maruti due to lower prices of EVs.

 Rivalry among existing firms

MEML faces high level of rivalry from other existing firms. There is no market
leader in EVs segment currently and each of the firm is trying its best to gain the
competitive edge. There is no differentiation in the product and services that the
firms are offering as the EVs offered by each of the firm almost has the same
output. Additionally, they all are targeting the same segments. So, there persists a
close competition among the firms and the only way MEML could gain
competitive edge is by providing some unique features in its EVs and offering it
at lower price than the others.
 Bargaining power of suppliers
MEML can strengthen its position against suppliers by decreasing the dependency
on one or a few suppliers. This will result in increased price sensitivity. By
developing the long-term relationships with different suppliers, they can lower the
suppliers’ bargaining power and at the same time will improve its supply chain
efficiency.

 Bargaining power of buyers

By increasing and diversifying their customer base MEML can manage the
bargaining power of buyers. This can be done by introducing new products,
targeting new market segments and adopting product diversification strategies. By
incorporating innovation in their products and offering excellent customer
experience, MEML can increase switching cost which will ultimately reduce the
bargaining power of buyers.