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Future of mobility | Mahindra War Room 2013 | North Zone Winners

An assessment on future of mobility, and what can companies do to excel in this market.

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Future of mobility | Mahindra War Room 2013 | North Zone Winners

  1. 1. Mahindra War Room 2013 Business Strategy for ‘Future of Mobility’ Pulkit Bohra M106/12 2nd Year Pulkit Mathur M107/12 2nd Year Rahul Gupta M108/12 2nd Year Tarun Gupta M044/12 2nd Year Submitted by: Team Mavens, IIM Ranchi Members:
  2. 2. 2 Executive Summary Mahindra Redefining Future of Mobility Individual Transport Mixed Transport Public Transport • Fuel Price • Govt. Mandates Congestion Connected Driving Challenge 1 Challenge 2 Mega Trend 2 Wheeler: Mahindra should create a niche with high speed e-bike 3 Wheeler: Mahindra can trigger next big disruption in Tier 2, 3 mass transport by organized e-Rickshaw sales 4 Wheeler: EVs over PHVs is the long term bet — Concern 1 (Price): Mahindra should lease and not sell battery to reduce upfront cost — Concern 2 (Range, Charging Time): Mahindra to enter into PPP agreements for battery swapping stations Car Sharing: Mahindra should pioneer Free Floating Car Sharing Car Rental: Use Social Media to reach Target Customers for Watts-Up Use apps like Folksvagn to give car pooling services to e2O customers OEM Partnerships: Partner with Qualcomm / Delphi for Enabled Equipment Services Provider Partnership: Partner with IBM Telematics Services Provider with an innovative implementation model New Revenue Model: Pricing Innovation; Payer Innovation; Package Innovation TRANSPORT MEDIUMS CHALLENGES & TRENDS RECOMMENDATIONS
  3. 3. Team Mavens , IIM Ranchi 3 11h50 Arrival at the clients premises • Calendar in Smartphone Activated • Automatically Calls Driverless Car 11h20 Working in office Preparing for the next client meeting. Your location aware smartphone Detects meeting at 12’o clock and calls driverless cars to pick you up Is this a Science Fiction ? 11h00 Preparing for Client Meeting Your smart car’s interactive dashboard shows you the best restaurants around & books a table for you Rerouting “Traffic Jam Ahead” A car ahead of you notifies your car that a truck ahead has lost its load and is causing traffic jam. Your car in turn calculates a difference route. Mobility Solutions – Science Fiction or Reality???
  4. 4. Team Mavens , IIM Ranchi 4 Ride sharing Car sharing P2P car rental Smart parking Telecommunicating Real time Traffic management Incentives (Discounts, Travel vouchers etc.) Integrated fare management Or the Future of Mobility? Travel Assistant apps Car sharing Multi Modal transportation solutions Bike sharing Autonomous Vehicles Connected user charging Road user charging Real-time traveler information Mobility Solutions – Science Fiction or Reality???
  5. 5. 5 Information Collection Secondary Research  Leveraged access to 10+ databases with IIM Ranchi Library  Studied research reports, company annual reports, analyst reports  Drawn inferences from published articles in the media Primary Research  Interviews with rickshaw drivers, passengers & NDMC heads  Project Director NDMC – OM Prakash Mishra; Alok Bhatacharya, Director Planning, UTTIPEC  Field survey conducted with 174 respondents Analyzed data gathered to determine the following:  Market Dynamics  Drivers and Restraints in the Market  Critical Success Factors Future Projections  Growth Trends from the industry reports  Stakeholder Views Quality Check & Information Analysis  Five objectives analysed in detail  Recommendations given based on the analysis done in the initial sections Case Objectives & Recommendations Research Methodology Team Mavens , IIM Ranchi
  6. 6. Team Mavens , IIM Ranchi 6 Case Study Objective – I Mahindra Redefining Mobility
  7. 7. ROAD SENSORS Electric charging infrastructure : Smart grids Automatic Toll Payment Systems Gets on-spot offers from shops Efficient parking & charging Choose the optimised path Accident & medicals POINT A POINT B TOLL BOOTH FUTURIST CAR CHARGING STATIONS SHOPPING COMPLEX / FOOD MARTS GPS TRACKING & CONNECTIVITY MULTI MODAL TRANSPORTATIONS HOSPITALS & EMERGENCY SERVICES PARKING SYSTEMS WITH CHARGING IN EACH SLOT SERVICES & REPAIR SHOPS Future Not Far Away: Moving from point A to B Please Watch In Full Screen Mode Click to start ……
  8. 8. Team Mavens , IIM Ranchi 8 Mahindra Redefining Mobility Case Study Objective – II
  9. 9. Team Mavens , IIM Ranchi 9 People looking for new modes of Mobility: Rising Fuel Costs, Govt. Mandates & Rising Incomes in Developing World Current and proposed global fuel economy standards Rising middle Class Income in India Growing Oil Demand Alternative Source of Fuels Mass Transport Rising Congestion Car Sharing New Trends 2013 Source Unplugged: Electric vehicle realities versus consumer expectations, Deloitte; International Energy Agency
  10. 10. Beijing, China: Public, Large, Emerging What works? Car ownership growing at a CAGR of 12% What does not work? Mean travel time to work of 52 minutes 68 transport related deaths per Mn Key Modal Split- Individual, Public City Size- Large, Small Prosperity- Mature, Emerging Hong Kong: Public, Large, Mature What works? Highly developed multimodal mobility system. Smart card penetration at 2.9 cards per citizen What Does not work? Absence of car mobility sharing Baghdad, Iraq: Individual, Large, Emerging What works? High number of registered vehicles (0.55 per capita) What does not work? No clear mobility strategy, no car and bike sharing, no smart transit cards Atlanta, USA: Individual, Small, Mature What works? Extremely low journey-to-work time at 26.6 min What does not work? Extremely skewed modal split towards personal cars (95%) Off-scale carbon emissions Vienna, Austria: Public, Small, Mature What works? Very high usage of public transport What does not work? Zero penetration of mobility cards, very low rate of car sharing Toronto, Canada: Individual, Large, Mature What works? High satisfaction with transport related facilities What does not work? Negligible smart card penetration, high carbon emissions Global Mobility Models – Identifying the Game Changers Sources: Future Of Urban Mobility, Arthur D Little
  11. 11. Team Mavens , IIM Ranchi 11 Case Study Objective – III Mahindra Redefining Mobility
  12. 12. Type Of Vehicle Current Future 2 Wheelers E-Rickshaws Mass Transport Electric Vehicles Car Sharing/Pooling Current Future Current Future METRO TIER 1 TIER 2 KEY TAKEAWAYS Show rapid growth in: • Electric Vehicles • Car Sharing/Pooling Show rapid growth in: • Car Sharing/Pooling • Electric Vehicles Show rapid growth in: • E-Rickshaws • Electric Vehicles Mass Transport & 2-Wheelers have sustained in all three regions Changing Trends: Modes Of Mobility In India Source : EV market in India, Netscribes; Future of mobility (IBM)
  13. 13. Team Mavens , IIM Ranchi 13 Case Study Objective – IV Mahindra Redefining Mobility
  14. 14. Future Of Mobility Urbanization SMART Cities Zero Emissions Zero Accidents E-Mobility Generation Y EFFECT • Increased population • Increased traffic • increased parking issues CAUSE • Currently very expensive offerings – Beyond the reach of common man • Increased shortage of fossil fuels • Shift towards model of “Pay per Use” rather than own a vehicle. • Web connected vehicles. • Increased pollution & stress on green global • Increased trends on life preservation technology hence more time delays. Tracking Causes Affecting New Mega Trends For Future Of Mobility Source Strategic Analysis of the Future of Global Urban Mobility, Frost & Sullivan
  15. 15. CHALLENGES IDENTIFIED GOVERNMENT MANDATES ON FUEL EFFICIENCY CONGESTION SAFETY CONNECTIVITY KEY TRENDS IDENTIFIED Future Of Mobility IDENTIFIED TWO KEY CHALLENGES IDENTIFIED TWO KEY TRENDS By leveraging on the identified “Key Trends” to mitigate the risks of “Industry Challenges” Mahindra can redefine the Future of Mobility Mahindra Redefining The Future Of Mobility Source Strategic Analysis of the Future of Global Urban Mobility, Frost & Sullivan
  16. 16. Team Mavens , IIM Ranchi 16 Case Study Objective – IV Mega Challenge 1 Rising Fuel Costs Government Mandates on Fuel Efficiency Recommendation 1 PHV looks good in Short Term; EV is the Long Term Bet 2 Wheelers 3 Wheelers 4 Wheelers 2W market Crowded; Mahindra can differentiate with Electric Strategy Organizing the e-Rickshaw market could be the Next Big Disruptive Innovation in Tier 2-3 cities’ Mass Transportation Mahindra should Lease batteries to Reduce Upfront Cost; PPP is the best way out to develop charging infrastructure
  17. 17. Team Mavens , IIM Ranchi 17 Electrotherm invested in Electric 3 wheeler and Hybrid Bus. Electric 3-wheelers & Mass Transport Lohia invested in developing a Electric 3 wheeler. Electric 2-wheelers, production capability & strategic alliances Hero Eco has acquired Ultra motors based in London. Avon has a strong network of dealers & Sub dealers (bicycle). Ampere has products in Electric 2 wheelers, Puller, Trolley & Golf car segment. All competitors operate in electric 2-wheelers segment Key Takeaways for Mahindra Can encash upon the already existing acceptability towards of Electric 2-Wheelers Should invest in development of hybrid mass transportation vehicles No Indian competitor in Electric 4 wheelers segment No competitor focusing on building charging infrastructure. Competitors’ strategy for 2-3 W EV segment 2-Wheeler Electric Rickshaws Electric VehicleElectric Vehicle Source Electric Vehicle Market India, Netscribes
  18. 18. (1) Cumulative figures for the 5 Year Blocks Market Share – Segment Wise Market Size & Growth Consumers Preference REASONS TO ENTER HIGHEST SELLING E-VEHICLE EXPANDING MARKET WIDELY ACCEPTED HIGH GOVERNMENT INCENTIVIZATION 1 0 500 1000 1500 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Units ('000) +59.9% 4 Wheelers 1% 2 Wheelers 95% 3 Wheelers 1% Others 3% 55% 45% Consumers preferring battery operated 2 wheelers than ICE Others India Rides on 2 Wheelers: Opportunity for Mahindra to differentiate by targeting the High Speed e-Bikes 2 3 4 2-Wheeler Electric Rickshaws Electric Vehicle
  19. 19. Team Mavens , IIM Ranchi 19 Pradeep Patra, Electric Rickshaw driver, South Delhi I earn around Rs.600 per day now which is much more than what I used to earn while driving a manual rickshaw. Lack of clarity on regulations Uncertainty with respect to licensing costs. Competition from local Rickshaw manufacturers No data on how many Electric rickshaws have been sold till date. High acceptability rate because of • Greater earnings for rickshaw walas • Cheaper for passengers • Women can also drive E-Rickshaws Encouraging government initiatives: NDMC to provide charging stations at Chattarpur station, Delhi • Initiatives to develop Solekshaw (Solar Rickshaw) • Opportunity for PPP Risks Opportunities e-Rickshaws: Next Big Disruptive Innovation in Tier 2-3 Mass Transport Mohammed Neem Qureshi Passenger The cycle rickshaws after 11pm charge Rs.30 to Rs.40,” where as “The E-rickshaws drop me for Rs.10 outside my house.” 2-Wheeler Electric Rickshaws Electric Vehicle Mahindra should Organize this newly born market with a Quasi Brand Source : Primary Research in Delhi
  20. 20. Team Mavens , IIM Ranchi 20 Next Generation Vehicles: The Competition Is Tough Where do EVs stand among the new generation vehicles? What are the consumer expectations? What are the technical hurdles? Solar PHEV HV EV FCV 2 1 3 ? ?? Fuel Cell Vehicles Solar Battery Operated Vehicles Hybrid Vehicles Electric Vehicles Petrol Hybrid Electric Vehicles 2-Wheeler Electric Rickshaws Electric Vehicle
  21. 21. Existing needs Potential needs Driving Range Convenient / Comfortable Price Safety/Reliability New value added HV ■ Almost same or better as ICEV ■ Nothing changed from ICEV ■ High upfront cost but low running cost due to improved fuel efficiency ■ Almost same as ICEV ■ Almost same as ICEV EV ■ Shorter driving range than ICEV ■ Fewer charging stations than gas stations ■ Much more expensive than ICEV ■ Cheaper running cost ■ Some safety issues for battery are still to be addressed ■ Zero-emission ■ Usage as a storage PHV ■ Almost same or better as ICEV ■ Fewer charging stations than gas stations but PHEV can be driven by gasoline ■ More expensive than ICEV but better running cost due to better fuel efficiency ■ Some safety issue for battery are to be addressed ■ Zero-emission during electric driving mode FCV ■ Almost same as ICEV ■ Almost no charging station ■ Much more expensive than ICEV ■ Cause of Concern ■ Zero-emission Team Mavens , IIM Ranchi 21 Comparative Analysis: PHV good for Short Term; EV is the Long Term Bet 2-Wheeler Electric Rickshaws Electric Vehicle Source Electric Vehicle Market India, Netscribes
  22. 22. Team Mavens , IIM Ranchi 22 Consumer considerations before buying an EV ( priority) Vehicle price Charging Time Reliability (Range) Convenience to charge (Infra) Style and appearance Fuel Costs Government incentives Environmental impact Popularity PRIORITY Target Cities: Ajmer, Jaipur, Lucknow & New Delhi People Approached: 280 Eligible Responses: 174 Eligibility Criteria: Car Owner, Willing to purchase one in next 6 months Survey was conducted to gauge Consumer Preference for BEVs 2-Wheeler Electric Rickshaws Electric Vehicle
  23. 23. Team Mavens , IIM Ranchi 23 Survey Results: Four Major concerns for EV in the Indian Market High Charging Time Price Premium Driving Range Aesthetics 2-Wheeler Electric Rickshaws Electric Vehicle
  24. 24. Team Mavens , IIM Ranchi 24 e2O – Has it hit the nail on its head ? e2O Charge Time: 5 Hrs Just over 24% of respondents felt comfortable with charge time of more than 4 hrs e2O Price: ~ 6 lakhs Nearly 40% of the respondents are willing to pay this price 24% 27% 21% 15% 13% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total 8 hr 4 hr 2 hr 1 hr 30 mins Acceptable Battery Charging Time High Charging Time Price Premium Driving Range Aesthetics 41% 34% 15% 10% Willingness to Pay for an EV, INR < 4 Lakh 4 - 7 Lakh 7 - 9 Lakh > 9 Lakh High Charging Time Price Premium Driving Range Aesthetics Customers are Willing to Pay a Premium if Other Concerns are Rectified 2-Wheeler Electric Rickshaws Electric Vehicle
  25. 25. Team Mavens , IIM Ranchi 25 Aesthetics Low Awareness about e2O 73% respondents did not like looks of Reva e2O – Has it hit the nail on its head ? e2O Charge Time: 80 kms Only 16% respondents were comfortable with the driving range of 80 kms 16% 42% 79% 98%Expected Driving Range 80 km 160 km 240 km 320 km High Charging Time Price Premium Driving Range Aesthetics Customers have Range Anxiety and look for Better Aesthetics 2-Wheeler Electric Rickshaws Electric Vehicle
  26. 26. Team Mavens , IIM Ranchi 26 Mapping Key Survey Parameters with Recommended Solutions for each Parameter High Charging Time Price Premium Driving Range Aesthetics Leasing Instead Of Selling Batteries would reduce upfront cost Progressive innovation across R&D, Procurement and After Sales can help pass cost advantage to customers Battery Swapping will help remove Range Anxiety and issue of High Charging Time Mahindra should adopt PPP mechanism to set charging infrastructure SOLUTIONS KEY SURVEY PARAMETERS 1 2 3 4 2-Wheeler Electric Rickshaws Electric Vehicle
  27. 27. heavy UPFRONT PAYMENT for electric vehicle INR 6 Lakh OTHER ISSUES With electric vehicle • Driving range • Charging time • Charging Infrastructure Considerations Response Reasons Customer Responses to EV Adoption Lease And Don’t Sell Battery Solution To All the Problems BEV Gasoline Energy Consumption 100 Wh/km 15 km/L Charging Efficiency 90% 100% Net Energy Consumption 111 Wh/km 15 km/L Fuel Cost 4/kwh 70/L Driving Cost (Rs./km) 0.44 4.66 Daily Use 60 km 60 km Daily Running Cost 26.4 279.6 Yearly Running Cost Rs. 9,636 Rs. 1,02,054 Battery Lease Rs. 5,000 pm Savings/Year Rs. 32,418 Total Car Cost Battery System Cost e2O on-road price ~ Rs. 6 Lakhs Battery Price Component ~ Rs. 3 Lakhs Leasing the battery reduces upfront costs by up to INR 3 Lakhs A Yearly savings of INR 32 thousand economically justifies the use of Electric Vehicles B Leasing Instead Of Selling Batteries: Reduce Upfront Cost1 2-Wheeler Electric Rickshaws Electric Vehicle Source Survey Analysis, Mahindra e2O website
  28. 28. R & D Procurement & Production After Sales CATHODE Mn(LiMn2O4) Mn(LiMn2O4) LiFePO4 • IDENTIFIED 3 DESIGNS IN BATTERIES FOR EV Mass production • Scale merits • Safety Balance • Cost reduction • Energy density • Safety Cost leadership • Cost reduction • Safety STRATEGY Mahindra should: Adopt a Cost Leadership policy to gain higher customer penetration in the starting OEMS Non OEMS Joint Venture AESCPrime earth EV energy Deutsche Accumoti ve Mahindra should: • Tie up with LiB suppliers through Strategic alliance among OEMs & other suppliers • Brings Scale Merits • Enable coordinated decision making Re-fabricate Resell Re-fabrication of used battery to meet client’s need post dismantling. Resell of used battery as electric storage system, back-up battery, equalization, etc. Reuse Nissan has scheme and technology for reuse of used battery. Mahindra should try : • Recovery of rare metals • To pass cost advantages to consumer ALTERNATE SOLUTIONS : Progressive Innovation For Battery Cost Reduction2 2-Wheeler Electric Rickshaws Electric Vehicle Source: Company websites; Nikkei Japan
  29. 29. Team Mavens , IIM Ranchi 29 Deliver charged batteries Collect used batteries Delivery station Large battery distribution station Battery swapping/ charging station Battery swapping/ charging station Battery swapping/ charging station Delivery station Battery lease fee For charged batteries Charged Battery General consumer Mahindra can reduce vehicle price for battery cost with battery leasing – Can pass cost advantage to customers • Enables controlled charging at Battery Distribution Station – Longer battery life • Issue of Charging time is resolved • Huge Upfront Expenditure Proposed Battery Swapping Process Map Battery Swapping reduces Charging Time and Reduces Cars’ Upfront Cost3 2-Wheeler Electric Rickshaws Electric Vehicle
  30. 30. Team Mavens , IIM Ranchi 30 Potential Mechanism in India: PPP with Consortium of OEMs and Battery Swapping Station Company Automotive OEM Consortium Government (Public Body) R&D and Production Payment Battery Swapping Company Monetary Support EV Consumer Revenue Investment Battery Swapping Station PPP for setting up Charging Infrastructure: Mahindra should form a Consortium with other OEMs 4 2-Wheeler Electric Rickshaws Electric Vehicle
  31. 31. 31 2-Wheeler Electric Rickshaws Electric Vehicle Opportunity Matrix for EV Stakeholders Technology Finance Markets Sustain R&D Investments Coordinate International R&D Public/Private Support Fleet Procurement Harmonize Standards Private Develop Vehicle Financing Markets Identify sustainable EVSE Business Models Increase Model Diversity Reduce Battery Costs Enhance Performance Address Common areas of need Support Interoperability Demonstrate proof of concept Explore Public/Private acquisition models Traditional and battery only leasing Develop Re-sale Market Define clear-revenue models Create retail partnerships Introduce differentiated range, styling and functionality Int’l cooperation on harmonization Technology Finance Markets Policy Spread costs to accelerate growth Areas of Need Stakeholder s Sources: KPMG Report on Future Of Mobility
  32. 32. Team Mavens , IIM Ranchi 32 Case Study Objective – IV Mega Challenge 2 Rising Congestion Recommendation 2 Car Sharing Car Rental Mahindra should pioneer Free Floating Car Sharing Mahindra should use Social Media to reach its Target Customers for Watts-Up Mahindra should associate with Apps like Folksvagn to give an option of Car Pooling to its e2O customers Mahindra should pioneer in Pay per Use of Cars in Indian Market
  33. 33. Team Mavens , IIM Ranchi 33 “Mobility As A Service” MAAS station station Car sharing stations @ public parking lots •To sell more EVs to different consumers who cannot be reached by their conventional vehiclesCapturing EV Market •To take EV sharing as a trial-drive opportunity to its potential customers (providing them the experience of driving EVs)EV Trial Drive for Consumers •To collect usage and feedback of EVs from EV sharing usersConsumer Feedback for EV •To improve CSR by introducing more EVs for the society’s well-beingsCSR Additional Benefits Addressing the challenge of congestion Car Sharing Car Pooling Car Rental Services ■ Point to Point car sharing ■ Facility of online booking ■ Pick up and drop at any station Strengthen the existing rent-a-Reva offering with tie-ups with Easy cabs which is one of the most popular rental service in India $3Bn Dollar Rental car market in India according to Forbes Expand via tie-ups with third party app providers to offer car pooling solutions ■ Tie ups with web and sms-based pooling systems ( in Mumbai , in Bangalore) ■ Associations with employers to promote car pools in commercial and official complexes Sources: Unplugged Reality Vs. Consumer Expectations, Deloitte Report
  34. 34. One time registration fee per person 1000 Income from Operations Daily Rentals per car @INR 200/hr for 8 hrs 400 Revenues per month for 200 cars (INR Lakhs) 96.0 Daily operating cost per car of EV for 120km @15km/hr 52.8 Operating cost per month for 200 cars (INR Lakhs) 3.17 Monthly Car parking lease rate (INR Lakhs) 5.3 Operational Profit (INR Lakhs) 87.49 Initial purchase cost for 200 vehicles (INR Lakhs) 1400 Breakeven in months 16.1 1 Team Mavens , IIM Ranchi 34 Launch “Mahindra Mobility Services” •Initial fleet of 200 cars to start off •Start with Tier-1 cities like Delhi with 6 pickup points- CP, South Ex, Dwarka, DLF Cybercity Gurgaon, Noida, Punjabi Bagh to cover an area of approx 1000 sq Km. Set-up Rentals, Cost and Profit •Tie-ups with third party app providers to help locate or book a car in advance online •Tie-ups with banks to develop payment system Tie-Ups All figures in INR Become a member Register at and receive your member ship card via email Locate a Vehicle Use the car finder at or a smartphone app to locate a Mahindra EV. You can use any vehicle spontaneously or book a car in advance online or by phone 2 Access the vehicle Walk up to the car, hold your membership card against the card reader on the windshield and the doors will unlock. Enter your pin and rate the condition of the vehicle 3Drive Take car key which is showed next to the touchscreen unit, start the car and drive off. Drive as long as you want 4 Finish your trip Complete your trip in an available public parking space within the car home area. Charges are calculated by the minute and will be debited from your credit card after you exit the vehicle. Fuel, insurance, maintenance and parking are included at no additional cost 5 Sources: A revenue generating implement ation plan Implementation Plan For Point To Point Free Floating Car Sharing
  35. 35. Team Mavens , IIM Ranchi 35 Case Study Objective – IV Mega Trend Rising Congestion Recommendation 3 Equipment Manf. Partnerships Services Provider Partnership New Revenue Model Partner with Qualcomm / Delphi for Enabled Equipment Partner with IBM Telematics Services Provider with an innovative implementation model Pricing Innovation; Payer Innovation; Package Innovation
  36. 36. 36 Also, the user data collected from these offerings will be unique & very valuable DRIVERS • User profiling • Traffic prediction & advanced routing • Location based info • Remote vehicle control • Emergency & breakdown FLEET OPERATOR • Charging & billing • Performance Monitoring • Asset monitoring & planning • Asset maintenance MOBILITY PROVIDER • Intermodal travel • Car sharing • Pay-as-you-drive • M-commerce • Marketing & sales • Customer, Driver behaviour data 3rd PARTY • Analytics reporting • Performance planning • Business process integration • Service offerings Portfolio of compelling value added services : Market Differentiator For Mahindra Automobiles Changing Mahindra’s Customer Experience: Bringing Advanced Telematics Team Mavens , IIM RanchiQuest for Telematics 4.0, EY Study
  37. 37. 37 CURRENT STATUS FUTURE PROPOSAL HARDWARE MANUFACTURERS Delphi Qualcomm Motorola Visteon WIRELESS CARRIERS CONTENT PROVIDERS TELEMATICS SERVICE PROVIDERS MAHINDRA OEMs CURRENT TELEMATICS VALUE CHAIN Mahindra has partnered with Vodafone HARDWARE MANUFACTURERS Auto Suppliers PDA Manufacturer Handset Manufacturers WIRELESS CARRIERS TELEMATICS SERVICE PROVIDERS Call centers Content providers Portals MAHINDRA OEMs Cars/Truck/Buses/2-wheelers FUTURE TELEMATICS VALUE CHAIN Mahindra should partner with IBM for Telematics Services Provider Mahindra should partner with Qualcomm or Delphi for Telematics Enabled Equipment These Proposed Partnership with IBM, and Qualcomm or Delphi will prove to be Mahindra Advantage In Telematics Enabled Vehicles 1 2 Telematics Value Chain : Picture To Be Completed By Mahindra Team Mavens , IIM RanchiTelematics Position Paper, inCode 2001 ; Mahindra Information Desk
  38. 38. HARWARE MANUFACTURERS WIRELESS CARRIERS TELEMATIC SERVICE PROVIDERS AUTOMOTIVE OEMs TELEMATICS VALUE CHAIN IBMQUALCOMM VODAFONE 38 Car Sharing Cars On Demand Pay as you Drive Concierge Services VALUE ADDED SERVICES Advanced Mobility Service Hub INFRASTRUCTURE Track & Alert Remote Vehicle Control Point Of Interest Handling Emergency Handling Client data Mgmt. Offer Management Claims Management Planning & Reporting Vehicle data Collection Device Management Security & Privacy B2B2C Service Mgmt. SYSTEMINTEGRATION ALWAYS ON VEHICLE – ALWAYS CONNECTED © 2011 IBM Corporation23 Advanced Mobility Framework – Key Build/Buy/Partner Decisions IBM Advanced Mobility Service Hub Infrastructure SystemIntegration Web Portal / User devices „Always On“ Vehicle Connectivity Value Added Services Vehicle Data Collection 3rd Party Data Integration Data AnalyticsB2B2C Service Management Device Management Security & Privacy Mgmt Application Management Offer Management Order Management Contract Management Client Data Management Accounting and Billing Claims Management Planning & Reporting Product Data Management Road side assistance Call Centers Customer Support Backend Systems 3rd Party Content Dealer Backend Social Media Facebook, Twitter EV Charging Stations P Car on Demand Car Sharing Intermodal travel Pay as you Use Concierge Services Fleet Operator Utilities Govern- ment OEMs & Suppliers Insurance Service Provider Stakeholders: Business Models: Remote Vehicle control Vehicle reporting Point of interest handling EV Services Emergency Handling Track and Alert other services Business Core Services Technical Core Services BUSINESS CORE SERVICES TECHNICAL CORE SERVICES CLOUD SERVICES PARTNERSHIPS Proposed Framework Of Mobility for Connected Vehicles Team Mavens , IIM RanchiIBM GS - Automotive 2020
  39. 39. 39 TELEMATICS : “A Revenue Model For Mahindra” PRICING INNOVATION PAYER INNOVATION PACKAGE INNOVATION Innovation in both – amount of money charged & point of transaction with customer. Finding customers who are not the ultimate consumers of the product. Expanding product & brand value to new customer segments. Subscription Variables By-parts Rentals Bundled Vs. a-la-carte Ad supported Fee Based Social Networking White Labelling Componentization Mode Shifts Brand Extension Revenue Strategies help define what consumer wants, and offers flexibility & choice Telematics : Mahindra’s Innovative Revenue Advantage Team Mavens , IIM Ranchi Advanced Mobility-IBM Automotive,2011 ; Automotive 2020-IBM
  40. 40. Business Models of Future Urban Mobility “Google of Mobility” “Dell of Mobility” “Apple of Mobility” • B2C: Integrated mobility services for end customers that provide a seamless, multimodal journey experience • B2B: Integrated, multimodal mobility solutions on a turn-key basis targeted at cities and mobility service providers • Basic Mobility related offering, e.g. Car or bike sharing, no networking • Also Disruptive technological solutions to make “Google’s” and “Apple’s” Mobility models possible(e.g. drive-in-drive-out transponder systems for garages • Single point of access for mobility and supplementary services(Identification , information, booking, payment) • Focus on data volumes and penetration rates in population Business Model Vision Insights Integration Single point of access What Are The Alternative Models For Mahindra’s Market Positioning ? Team Mavens , IIM RanchiSources: Future Of Urban Mobility, Arthur D Little
  41. 41. Mahindra: The “Apple Of Future Mobility Industry” For accelerated growth Business Model Target Customers Offerings Core Assets & Capabilities Revenue Source Mobility services platform manager  Traveller Community at large  Single point of access for getting information, planning, booking and payment for a journey  IT enabled platform  Consumer Interface  Supplier sourcing and contracting  Transaction fees  Interest Income  Advertising and chip storage space leasing Mobility chain integrator  Individual (high end) traveller  Personalized seamless journey to get as fast and convenient from A to B  Brand  Dense service network  Partnerships  Fee for service Mobility solution provider  Cities  Mobility chain integrators  Tailored, integrated, multi-modal mobility solutions on a turnkey basis  System integration and contracting  Public Private Partnerships  Case specific Mobility Products and service provider  Traveller Community  Cities  Mobility solution providers  Stand alone, high- performance, ease to integrate mobility products/services  Technology leadership  Open boundaries  Case specific Mahindra with a strategy of being “Mobility Chain Integrator” & “Mobility Solutions Provider” can become The “Apple” of Mobility Industry In The Future Team Mavens , IIM RanchiSources: Future Of Urban Mobility, Arthur D Little
  42. 42. Launch of Reva Launch of E2o in India Mahindra acquired REVA Mass Adoption of Electric vehicles Participate in PPP’s to setup basic infrastructure MaaS (Mobility as a service) facilities like car pooling car sharing Invest in telematics for enhanced services Lease not sell battery AdoptionofElectricVehicles Time Normal Evolution Disruptive Evolution YoBykes launched in India 20042001 2010 2013 2015 2018 Electronic Rickshaws Disruptive evolution by Mahindra will quicken mass adoption of electric vehicles and position Mahindra as a leader in the respective industry 42 1 2 3 4 5 Team Mavens , IIM Ranchi
  43. 43. Thank you for your time and attention!
  44. 44. 44 APPENDIX
  45. 45. Team Mavens , IIM Ranchi 45 Segmentation of primary modes of Transportation Public Transport Rail Bus Taxi Private Transport Car Motorcycle Non-motorized Transport Bicycle Walking Motorized transport services that offer a shared mode of transport that is available to the general public for a price. This includes rail, bus, and taxi. Motorized transport that is privately owned by individuals for their exclusive personal use. This includes passenger cars, SUVs, MPVs etc Transport that provides personal and goods mobility without the use of a combustion motor or battery . This includes walking and bicycles.
  46. 46. EVs a means of New Transportation Smart building, Smart plant Renewable energy EV charger Rechargeable battery Smart Grids Smart house New generation parking Personal mobility BRT/LRT New transportation Sharing system Road sensor Vehicle type EV Battery Charging EVs get connected to a new transportation Change from stand-alone products to networked products Severe traffic congestion Increased population Needs for city transportation systems Increased CO2 emission Needs for improvement
  47. 47. Aggregate Running and Operating Costs to be the Major Drivers Team Mavens , IIM Ranchi 47 BEV Gasoline Electric Scooter Petrol Scooter Energy Consumption 100 Wh/km 15 km/L 15.3 Wh/km 45 km/L Charging Efficiency 90% 100% 90% 100% Net Energy Consumption 111 Wh/km 15 km/L 17 Wh/km 45 km/L Fuel Cost 4/kwh 70/L 4/kwh 70/L Driving Cost (Rs./km) 0.44 4.66 0.07 1.56 Daily Use 60 km 60 km 60 km 60 km Daily Running Cost 26.4 279.6 4.2 Rs. 93.6 Yearly Running Cost Rs. 9,636 Rs. 1,02,054 Rs. 1,533 Rs. 34,164 Yearly Maintenance Rs. 600 Rs. 2400 Major Repairs & Replacements Rs. 6,500 Rs. 2,500 Total Yearly Costs Rs. 8,633 Rs. 39,064 Savings/Year Rs. 92,418 Rs. 30,431
  48. 48. 48 “Soon you will not be able to make money anymore with cars that don’t customer smartphones” CEO, Premium Carmaker “When we look at cars, we see another smartphone” CEO, Premium Telecom operator What Is Telematics ? Telematics 1.0 •Hands-free calling & screen-based navigation Telematics 2.0 •Portable navigation & satellite radio Telematics 3.0 •Introduction of comprehensive connectivity to vehicle Telematics 4.0 •Seamless integration of mobility & the web : BIGGEST OPPURTUNITY YET Target versions of telematics for automakers in 2013 What are the telematics end-services? How are telematics services delivered? Stakeholders On Demand Infotainment On Demand Infotainment Safety & Security Diagnostics Vehicle to Vehicle Other Services Service delivery infrastructure User interface Wireless network (connectivity) Customer support Automotive sector Government Telematics service provider Insurance sector Information technology Telecom sector Device manufacturers Others Vehicle independent services Vehicle centric services Team Mavens , IIM Ranchi