Mahindra & Mahindra PESTLE Analysis
Detailed PESTLE analysis of Mahindra & Mahindra examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Political factors impact the business strategy and its operations in the automotive industry. There are a number of political factors such as government political framework stability, government framed policies and guidelines in the automotive sector for all the companies. Like in India, the Government is focused on driving voluntary old vehicle scrapping policy. The government is also keen on spreading the E-vehicles market to curb emissions. Mahindra & Mahindra has tied up with central Govt. and many states along with other firms to create an Electric Vehicle boom in India. Even the recent 100% Foreign direct Investment announcement in the automotive sector is a challenging threat for this firm. The govt. initiatives such as Make in India can drive its sales with tax rebates and other associated benefits. It is important to work in tandem with Government rules and set policies to get the right opportunities in the right market.
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This concludes the political factors in the Mahindra & Mahindra PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Mahindra & Mahindra:
The economic factors such as increasing inflation, rising recession, income and employment level play a major role in the sales of automobiles. The good economic conditions influence the purchasing decision of consumers.
Even the import-export duties, tariffs and taxation can increase the selling price for automobiles. Mahindra & Mahindra need to plan its business in sync with the macro and micro economic factors. The rising fuel prices, GST can affect the demand for this vehicle’s manufacturer. In rural areas, factors such as lower household income, low employment rate need to be considered while selling. As disposable income is expected to increase post COVID-19, people will buy more personal vehicles. Even the sale of tractors for this firm is expected to improve any time after the situation normalizes.
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Social Factors:
Following are the social factors impacting Mahindra & Mahindra PESTLE Analysis:
There are many social factors which have an ability to change dynamics of purchasing automobiles. Demographic factors such as age, gender, income level, location, employment level, marital status etc. impacts the choices and lifestyle decisions. Working class living in urban areas like cities prefer to have a social status and for that they tend to buy their own personal vehicles. Even a big family prefers 4 wheelers rather than 2 wheelers which gives them value for money. This firm has ventured into E-vehicles with low running costs which has huge demand potential. There is a lot of opportunity to target different market segments with different business and functional strategies. Due to fear of COVID-19 pandemic spread, people started buying more cars as compared to travelling in public transportation. Mahindra & Mahindra can gain a big market share by analyzing and operating in the market properly.
Technological Factors:
The technological factors in the PESTLE Analysis of Mahindra & Mahindra are mentioned below:
Technological factors are pivotal to focus upon for Mahindra & Mahindra in order to gain competitive market share. The company is the pioneer for Electric Vehicles in India. This auto company is actively pursuing the growth of the EV market. It has invested over Rs. 500 crores in its EV project under the new EV policy of the Government of Maharashtra. It is the first auto company having its products well integrated onto a cloud-based technology platform. It is also leveraging the latest technologies like IOT to automate its manufacturing. These technological advancements help this company to track its processes and resources in real time. It also has digitally enabled sensors DIGISENSE installed in all its vehicles including passenger and commercial vehicles. It is also offering personalized solutions and designer cars with new technology like the e3W and the Treo. It needs to continuously upscale its technology and invest in research and development in order to compete with the Global and national automobile manufacturing firms.
This can boost its sales and market share.
Legal factors:
Following are the legal factors in the Mahindra & Mahindra PESTLE Analysis:
Legal factors in the automobile sector are really stringent as it concerns the safety and security of passengers, customer data privacy, environmental laws, patents, labor laws in the manufacturing plants etc. work environment, safety of employees, wage policies etc. Mahindra & Mahindra need to follow all relevant laws to build market trust and loyalty. It needs to focus on its product failures during the testing phase properly to avoid any lawsuits after delivery. The safety laws need to be adhered to while designing and rolling out the vehicle in the market. This company is also manufacturing BS6 gasoline engines which is less polluting keeping in mind the environmental laws. This company can increase its market share by abiding to all legal practices in its business operations.
Environmental Factors:
In the Mahindra & Mahindra PESTLE Analysis, the environmental elements affecting its business are as below:
The environmental factors are really important for Mahindra & Mahindra to make a sustainable business model in the long term. The climate change and focus on reducing vehicular pollution which is adding up to global warming is crucial to be considered. This firm is already making many eco-friendly business operations to drive a positive impact on the environment. Its focus on reducing carbon footprints is immense in its business strategy. It has been ranked as one of the top 100 most sustainably managed companies.
It has initiated an internal carbon price of US$10 per ton of carbon emitted. The company has the long-term sustainability vision to become carbon neutral by 2040.The company is quite committed to focus on the growth of economy, environment and society. These strengths can make it grow its profit margin and overpower its competitors.
To conclude, the above Mahindra & Mahindra PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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