Keshub Mahindra, the patriarch of the Mahindra group, died on Wednesday at the age of 99.
“Today, the industrial world has lost one of its tallest personalities.” Shri Keshub Mahindra was unrivalled; he was the nicest person I’d ever met. I always looked forward to our meetings and was inspired by how he linked business, economics, and social issues. Pawan Goenka tweeted, “Om Shanti.”
According to a recent Forbes report, the former chairman of the Mahindra and Mahindra group, who retired in 2012, was among the world’s oldest billionaires. In 2023, he had just re-entered the coveted billionaire list.
However, the businessman turned philanthropist leaves a larger and broader legacy. He played a key role in transforming India’s indigenous auto industry into a force to be reckoned with.
‘We know nothing about the automobile industry.’
Keshub Mahindra’s story is intertwined with the history of India’s automobile industry. The Mahindra and Mahindra group was founded two generations before Anand Mahindra, Keshub Mahindra’s nephew and the group’s chairman emeritus.
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In 1945, two brothers, Kailash Chandra Mahindra and Jagdish Chandra Mahindra, founded the company as a steel trader. Kailash Chandra Mahindra, Keshub Mahindra’s father, had met the inventor of Jeep, Barney Roos, in Washington. That is how the company became a Willys Jeep assembler in India.
A young Keshub, fresh from Wharton University and well beyond his boyhood ambitions of becoming a soldier or a farmer, was summoned to a meeting with the defence minister. This was in 1947, when India had just gained independence but was having difficulty obtaining spare parts for their tanks from Britain and other countries.
The government stated at the meeting that it intends to develop its own automotive industry. “We don’t know anything about the auto industry,” Keshub Mahindra admitted to the defence minister. That didn’t stop Mahindra or the only other automakers at the time, Premier Automobiles and Hindustan Motors, from producing indigenous vehicles.
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When there were no suppliers or vendors, M&M began manufacturing jeeps entirely on its own. In order to produce 2,000 Jeeps per year, they had to manufacture engines, transmissions, axles, stampings, and the body, according to Keshub Mahindra in an interview with Autocar.
Licensing, price controls, and capacity limits
For the next 30 years, the group fought many battles, both from the perspective of the supply chain ecosystem and the numerous rules and regulations in place at the time. It was the era of licence raj, and no matter how many times M&M applied, they were denied a license to manufacture automobiles. In fact, they were rejected a dozen times as they attempted to manufacture cars in collaboration with various multinational corporations.
Furthermore, companies could not raise their prices without the approval of the government, and their capacity was also restricted by rules. The government once sent the group a letter asking why they should not be prosecuted for exceeding capacity. Keshub replied to the letter, “Prosecute us.”
Forced to do things he describes as “crazy,” Keshub also admits that it has forced Indian manufacturers to cut costs through frugal engineering and other means — a move that has helped them compete. In the long run, he admitted in the Autocar interview, it was a good thing.
The bravery of change
“Dream of accomplishing the impossible — because impossible things do occur.” Only the brave can transform their lives,” he explained.
He was the chairman of M&M for 48 years and expertly guided the company through turbulent times. The group now has interests in software, financial services, and other areas. The group’s revenue in FY22 was 90,170 crore, up from 74,277.78 crore in FY21.
Under Keshub Mahindra’s leadership, the auto industry grew exponentially, both organically and inorganically, and expanded into light commercial vehicles, tractors, and even farm equipment. It acquired companies such as Punjab Tractors and Gujarat Tractors, as well as companies in South Korea such as SsangYong Motor, entered the two-wheeler market, and made early forays into the electric vehicle market (EV).
Years later, Anand Mahindra and his father, Harish Mahindra, formed another unusual partnership when they loaned one lakh rupees to Uday Kotak for a business that would later become the Kotak Mahindra Bank.
Not just for business.
Even before retiring in 2012, Keshub did not devote all of his time to business — he made room and time for philanthropy. Keshub also founded and ran Housing and Urban Development Corporation (HUDCO) for many years.
“During this time, I visited some of India’s most deplorable slums.” When I got home, I’d wonder how people could live like this. That had a significant impact on my life,” he told Wharton. Some of the many charity projects he supported with the help of his family included education for girls and housing for cancer patients.
