Analysis: Why Mahindra exited Moto3

Exactly an year after clinching their maiden win, Mahindra has pulled the plug on their Moto3 manufacturer programme. Rachit Thukral jots down a list of reasons behind this move.

Analysis: Why Mahindra exited Moto3
Miguel Oliveira, Mahindra
Danny Webb, Mahindra
Mufaddal Choonia, Mahindra Racing SPA CEO, Davide Borghesi, Mahindra Racing Head Design and Development
Francesco Bagnaia, MAPFRE Team Mahindra and Juanfran Guevara, MAPFRE Team Mahindra
Mahindra factory
Albert Arenas, Aspar Team
Winner Francesco Bagnaia, Aspar Team Mahindra with Jorge Martín and Mufaddal Choonia
 Felix Rosenqvist, Mahindra Racing
 Felix Rosenqvist, Mahindra Racing, Dilbagh Gill and Nick Heidfeld, Mahindra Racing, celebrate on the podium
Francesco Bagnaia, Aspar Team Mahindra
Amittrajit Ghosh, Ashwin Naik, Mahindra SUV 500
Amittrajit Ghosh, Ashwin Naik

Mahindra entered the junior class of MotoGP in 2011 (then the 125cc championship) to promote their newly-formed two-wheeler business and transfer racing technology to road-going bikes.

The Indian manufacturer took their time to establish their feet in Moto3 - it wasn’t until 2013 that they took their first podium finish.

In 2015, Mahindra shifted its focus on being a manufacturer, scrapping their own team to partner with four-time world champion Jorge Martinez’s Aspar squad.

The following year, Mahindra enjoyed a breakthrough season, with Aspar and sister brand Peugeot scoring three wins between them. Considering the opposition from mighty manufacturers like KTM and Honda, who have a long history in motorsport, it was a remarkable feat from Mahindra.

While Mahindra was slowly but steadily becoming a force in Moto3, it’s two-wheeler business had been struggling to gain traction in India’s competitive market conditions.

Continued losses and poor market reception forced an overhaul of Mahindra’s two-wheeler business, with the company announcing in a press conference last year that it would focus on niche and premium segments.

It is highly likely that a decision to exit Moto3 was taken at the same time by Mahindra's Board of Directors as their bike sales could no longer justify the expenditure in Moto3.

A sharp decline in performance this season would have only reaffirmed their decision.

Formula E and electric mobility

Mahindra attributes its shift towards electric mobility and Formula E.

Like most automotive manufacturers in the world, Mahindra is heavily investing in electric vehicles. It remains the only Indian manufacturer to produce electric cars and has plans to expand its portfolio in coming years.

It has also been participating in the all-electric Formula E series since the inception of the championship in 2014 and claimed its first series win in Berlin earlier this month.

While FE started as a one-make championship, manufacturers are gradually being allowed to develop power unit components, resulting in a steady rise in expenditure.

Mahindra has committed to the series until 2021, by the time the budgets would have risen significantly.

Dakar ambitions

It’s an open secret that Mahindra has been vying a potential Dakar assault for many years. Considering that they are primarily a manufacturer of SUVs, a Dakar programme allows them to showcase the off-road capability of their vehicles.

“I’ve had several discussions regarding the Dakar with Mahindra,” the manufacturer’s affiliated driver and two-time Asia Pacific Rally Champion Gaurav Gill told earlier this year.

“They are definitely very keen. It’s in the pipeline, but the board still has to take a decision. But I’m  sure they are keen.

“I’ve been told by the top company bosses that they would love to go to Dakar one day. But I’m not certain when that would come, but I can assure you they would like to go to Dakar.”

Despite the financial might of Mahindra (including the wider Mahindra Group), the company has to justify expenditure on racing to their Board

Scrapping the Moto3 programme clears up funds which could be used for creating a modified version of the Super XUV500, which is currently being raced in the Indian rally championship.

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