Anand Mahindra’s tweet to Elon Musk’s comment shows the difficulty of doing business in India


For Elon Musk, disrupting the whole automotive industry was far easier than entering the Indian market.

Because Musk has been fighting hard with the Indian regulators to bring down the excessive import duties for auto components and find alternative methods to get the job done.

While replying to a story related to the British tech company Dyson’s failed attempt at building an electric car, Elon Musk on Tuesday said that the large legacy automakers sell their cars at low to zero true margins.

“Most of their profit is selling replacement parts to their fleet, of which 70% to 80% are past warranty,” Musk said. Musk gives an example of razors and blades to put his argument forward.

“New car companies lack this advantage. Also lack sales & service infrastructure,” Musk adds.

To this message, Indian industrialist Anand Mahindra accepts Tesla CEO Elon Musk’s proposition that motor vehicle production is a tough nut to crack and that generating positive cash flow is even harder. “And we’ve been doing that for decades now. Still sweating & slaving away at it. It’s our way of life…” Mahindra adds.

Last week, Mahindra & Mahindra (M&M) reported a 17 percent increase in domestic passenger vehicle sales at 15,973 units in August as compared to the same month last year.

The company had sold 13,651 units in August 2020, M&M said in a statement.

Twitter users praised Mahindra’s resilience in the face of adversity. “Only visionaries have the guts of doing so and that too with so much passion that can be seen in the impact it created amongst the society,” said a Twitter user.

One Twitter user also praised Elon Musk’s entrepreneurial tenacity, “Citing the zero or low margins of legacy carmakers, big car companies make their profits not from the sales of their cars but from the sales of replacement parts like “razors and blades…Well Said.”

“Whole contentment comes from a number of jobs you great guys are creating for a number of people. Manufacturing with innovation is hard and hats off to you guys,” tweeted Sheela.