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Starting its journey from the day when the first cars and truck rolled on the streets of Mumbai in 1898, the Indian vehicle market has actually demonstrated a sensational development to this day. Today, the Indian auto market presents a galaxy of ranges and designs fulfilling all possible expectations and globally established industry requirements. A few of the leading names echoing in the Indian auto market consist of Maruti Suzuki, Tata Motors, Mahindra and Mahindra, Hyundai Motors, Hero Honda and Hindustan Motors in addition to a variety of others.
During the early stages of its development, Indian auto market heavily depended upon foreign innovations.
Nevertheless, throughout the years, the makers in India have actually begun using their own technology developed in the native soil. The flourishing market place in the country has actually attracted a number of car producers including some of the reputed global leaders to set their foot in the soil eagerly anticipating enhance their profile and prospects to new heights.
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Following a short-term setback on account of the international economic recession, the Indian auto market has once again got an impressive momentum experiencing a buoyant sale for the -very first time in its history in the month of September 2009. At present, about 75 percent of India's vehicle market is made up by little vehicles, with the figure ranking the nation on top of any other country on the world.
Over the next two or three years, the country is expecting the arrival of more than a dozen new brands making compact car models.
Like many other nations India’s highly developed transportation system has played a very important role in the development of the country’s economy over the past to this day. One can say that the automobile industry in the country has occupied a solid space in the platform of Indian economy. Empowered by its present growth, today the automobile industry in the country can produce a diverse range of vehicles under three broad categories namely cars, two-wheelers and heavy vehicles.
Today, India is among the world’s largest producers of small cars. The New York Times has rated India as a very strong engineering base with an incomparable expertise in the arena of manufacturing a number of low-cost, fuel-efficient cars has encouraged the expansion plans of the manufacturing facilities of a number of automobile leaders like Mahindra, Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki. While the automobile industry in India is the ninth largest in the world, the country emerged as the fourth largest automobiles exporter on the globe following Japan, South Korea and Thailand, in the year 2009. The automobile sector of India is the seventh largest in the world. In a year, the country manufactures about 2.6 million cars making up an identifiable chunk in the world’s annual production of about 73 million cars in a year.
The country is the largest manufacturer of motorcycles and the fifth largest producer of commercial vehicles. Industry experts have visualized an unbelievably huge increase in these figures over the immediate future. The figures published by the Asia Economic Institute indicate that the Indian automobile sector is set to emerge as the global leader by 2012. In the year 2009, India rose to be the fourth largest exporter of automobiles following Japan, South Korea and Thailand. Experts state that in the year 2050, India will top the car volumes of all the nations of the world with about 611 million cars running on its roads.
Motor cycles manufacture makes up the major share in the two-wheeler segment of the Indian automobile industry. About 50% of the motorcycles are manufactured by Hero Honda. While Honda manufactures about 46% of the scooters, TVS produces 82% of the mopeds running on the Indian roads. About 40% of the three-wheelers manufactured in India are used for transporting goods with Piaggio manufacturing 40% of the vehicles sold in the Indian market. On the other hand, Bajaj has emerged as the leader in manufacturing three-wheelers used for passenger transport. The firm produces about 68% percent of the three wheelers used for passenger transport in India. The Indian passenger vehicle segment is dominated by cars which make up about 80% of it.
Maruti Suzuki manufactures about 52% of passenger cars while the firm enjoys a complete monopoly in the manufacture of multi-purpose vehicles. In the utility vehicles segment Mahindra makes up a 42% share. Tata Motors is the leader in the Indian commercial vehicles market while it holds more than 60% share. Tata Motors also enjoys the credit of being the world’s fifth largest manufacturer of medium and heavy commercial vehicles.
There is a very stiff competition in the automobile industry segment in India. This has helped many to realize their dreams of driving the most luxurious cars. During the recent past, a number of overseas companies have started grabbing a big chunk of the market share in both domestic and export sales. Every new day dawns in India with some new launches by active players in the Indian automobile arena. By introducing some low cost cars, the industry had made it possible for common men to buy cars for their personal use.
With some innovative strategies and by adopting some alternative remedial measures, the Indian automobile industry has successfully come unaffected out of the global financial crisis. During the current fiscal year, the Indian automobile industry rode high on the resurgence of consumer demand in the country as a result of the Government’s fiscal stimulus and attractively low interest rates. As a result the total turnover of the domestic automobile industry increased by about 27 per cent. Predictions made by Ernst and Young have estimated that the Indian passenger car market will have a growth rate of about 12 percent per annum over the next five years to reach the production of 3.75 million units by the year 2014.
The analysts have further stated that the industry’s turnover will touch $155 billion by 2016. This achievement will succeed in consolidating India’s position as the seventh largest automobiles manufacturer on the globe, eventually surging forth to become the third largest by the year 2030 behind China and the US. The Automotive Mission Plan launched by the Indian government has envisaged that the country will emerge as the seventh largest car maker on the globe thereby contributing more than 10 percent to the nation’s $1.2-trillion economy. Further, industry experts believe that the nation will soon establish its stand as an automobile hub exporting about 2.75 million units and selling about a million units to be operated on the domestic roads
Mahindra & Mahindra (M&M) is not just India's largest utility vehicle manufacturer anymore. It is the third-largest player in the passenger vehicle segment and in a neck-and-neck race with Tata Motors. It has set its sight on challenging the domination of Maruti Suzuki and Hyundai Motors. Pawan Goenka, as president for automotive and farm equipment sectors, is the main architect of this feat Mahindra and an independent India began their rise together.
In 1945, two enterprising brothers named J.C. Mahindra and K.C. Mahindra joined forces with Ghulam Mohammed and started Mahindra & Mohammed as a steel company in Mumbai. Two years later, India won its independence, Ghulam Mohammed left the company to become Pakistan’s first finance minister, and the Mahindra brothers ignited the company's enduring growth with their decision to manufacture Willys jeeps in Mumbai.
The Mahindra brothers believed that new modes of transportation could be a key to India’s prosperity, so one of their first goals was to build rugged, simple vehicles capable of tackling the Indian terrain. Early pioneers of globalization, the brothers collaborated with a wide range of international companies and before long, Mahindra’s reach extended to steel, tractors, telecom, and more.
Now, after 65 years, Mahindra has grown from a humble local outfit to a US $15.4 billion corporation employing more than 144,000 people around the world. It’s been quite an adventure so far, and they’re proud of our global leadership in utility vehicles, tractors, and information technology, as well as our significant presence in financial services, leisure and hospitality, engineering, trade, and logistics. As they accelerate into the 21st century, they’ll continue to pursue innovative ideas that enable people to rise. They’ve come a long way, but the journey has just begun.
Over the past few years, M&M has expanded into new industries and geographies. They entered into the two-wheeler segment by taking over Kinetic Motors in India. M&M also has controlling stake in REVA Electric Car Company and acquired South Korea's SsangYong Motor Company in 2011.
Mahindra & Mahindra is a major automobile manufacturer of utility vehicles, passenger cars, pickups, commercial vehicles, and two wheelers. Its tractors are sold on six continents. It has acquired plants in China and the United Kingdom, and has three assembly plants in the USA. M&M has partnerships with international companies like Renault SA, France and International Truck and Engine Corporation, USA.
M&M has a global presence and its products are exported to several countries. Its global subsidiaries include Mahindra Europe Srl. based in Italy, Mahindra USA Inc., Mahindra South Africa and Mahindra (China) Tractor Co. Ltd.
M&M made its entry into the passenger car segment with the Logan in April 2007 under the Mahindra Renault joint venture. M&M will make its maiden entry into the heavy trucks segment with Mahindra Navistar, the joint venture with International Truck, USA. M&M's automotive division makes a wide range of vehicles including MUVs, LCVs and three wheelers. It offers over 20 models including new generation multi-utility vehicles like the Scorpio and the Bolero. It formerly had a joint venture with Ford called Ford India Private Limited to build passenger cars.
Mahindra & Mahindra has a controlling stake in Mahindra Reva Electric Vehicles. In 2011, it also gained a controlling stake in South Korea's SsangYong Motor Company. Mahindra & Mahindra Ltd. (M&M), has launched its much awaited SUV, XUV 500, code named as W201 in September 2011. The last ‘500’ in the name is pronounced as ‘5 double-O’ (alphabet). The new SUV by Mahindra has been designed in-house and it is developed on the first global SUV platform that could be used for developing more SUVs.
Vision:
Mission:
To create India's largest automobile and automobile-related products distribution network by providing dealers and customers with the largest choice of unique world-class products and services.
Since 1945, the Mahindra group has built the company around the core idea that people will succeed if they are just given the opportunity. Employees across the Group constantly challenge conventional thinking to create solutions that make a significant difference in the lives of their customers. That’s why everything they build—be it a tractor, financial service, solar-powered lamp, or software—is designed to empower you to reach your potential.
Internally, they follow three basic tenets—accepting no limits, thinking alternatively, and driving positive change in everything they do. These brand pillars guide all their actions and business decisions from deciding whether or not to enter a new field or planning a portfolio of services.
From building green homes with the most eco-friendly materials to providing loans to rural entrepreneurs, from designing goods carriers that run on compressed natural gas (CNG) to offering educational programs and supporting Indian theatre, they strive to make a positive impact on all the lives they touch They created a tractor designed for small farming that is enabling farmers to mechanize for the first time.
Our motivation to give our best every day comes from our core purpose: we will challenge conventional thinking and innovatively use all our resources to drive positive change in the lives of our stakeholders and communities across the world, to enable them to Rise.
Our products and services support our customers’ ambitions to improve their living standards; our responsible business practices positively engage the communities they join through employment, education, and outreach; and our commitment to sustainable business is bringing green technology and awareness into the mainstream through our products, services, and light-footprint manufacturing processes.
This commitment to sustainability—social, economic, and environmental—rests upon a set of core values. They are an amalgamation of what they have been, what they are, and what they want to be. These values are the compass that guides our actions, both personal and corporate. They are:
India’s Mahindra & Mahindra Ltd. completes acquisition of a majority stake in SsangYong Motor Company On March 15, 2011, Mahindra & Mahindra Ltd. (M&M), India’s leading manufacturer of utility vehicles, today announced that it has completed all formalities related to the acquisition of a majority stake in SsangYong Motor Company (SYMC) and that the company is no longer in Court Receivership. Mahindra had emerged as the preferred bidder for SsangYong in August 2010. This marks the beginning of a new journey for SYMC and will also pave the way for both Mahindra and SYMC to emerge as a strong force allied together in the global passenger vehicle industry, through their strategic partnership. Present on the occasion were Mr. Bharat Doshi, Executive Director & Group CFO, Mahindra & Mahindra Ltd. and Dr. Pawan Goenka who is President of Mahindra’s Automotive and Farm Equipment Sectors. Key officials from the Mahindra Group and SYMC were also present.
For Mahindra, the biggest benefit from this partnership will be the opportunity to harness synergies between the two companies, while protecting their respective brand identities and ensuring quality. Towards this end, a Synergy Council comprising of senior management from both companies will be established to ensure focus and delivery of synergies between the two companies. The Council will focus on various aspects such as global procurement, new car development and business strategy to penetrate international markets. Strategic plans such as the India project which involves launching the Rexton and Korando-C in India have already been kicked off.
Also under discussion are opportunities for joint product and technology development and synergy in global operations and purchase. Mahindra has a strong IT system that is being reviewed for suitability for SsangYong. The company is also considering the possibility of Mahindra Finance setting up operations in Korea to enhance the sales of SsangYong vehicles. Mahindra has also proposed the following five point agenda for SsangYong:
SsangYong has also proposed the following investments:
Dr. Pawan Goenka, President, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd., mentioned that Mahindra was extremely conscious of SYMC’s Korean heritage and would only want to enhance it. SsangYong will be an independently run Korean company – with largely Korean Management – and will remain a ‘Made in Korea’ Brand. He also announced that the new CEO of SYMC will be Mr. Yoo-il Lee, while Mr. Dilip Sundaram from Mahindra will be the new CFO. He also announced the names of the new Board of Directors of SsangYong Motor Company. “This is a landmark day for all of us at Mahindra as it marks the beginning of what I am sure will be an enduring partnership with SsangYong Motor Company.
I would like to thank all the employees of SsangYong as well as the company’s creditors for the help and cooperation extended to us during this long process. As one of the country’s premier automotive companies, SsangYong brings with it a rich legacy of R&D and innovation. This legacy, coupled with the synergies between the two companies in the areas of R&D, product development and platform sharing, will make the combined entity of Mahindra and SsangYong a force to reckon with in the global utility vehicle space.
They are committed to nurturing the SsangYong brand in both the Korean and global markets and returning it to its days of glory,” said Dr. Pawan Goenka. “Mahindra brings with it a great deal of passion, domain expertise and knowledge of the global UV market, as India’s leading utility vehicle (UV) manufacturer. All of us at SsangYong look forward to working closely with the Mahindra team to help develop a new product portfolio and gain momentum in overseas markets,” said Mr. Yoo-il Lee, CEO, SsangYong Motor Company.
Mahindra enters high growth electric car segment acquires majority stake in REVA REVA was established in Bangalore in 1994 as a joint venture between the Maini Group of Bangalore, India and AEV LLC of California, US. Its REVA electric vehicle was first commercially available in Bangalore in 2001 and in London in 2004, under the G-Wiz brand. REVA is a technology innovator with the largest deployed fleet of electric cars in the global market today, available in 24 countries across Europe, Asia and Central and South America with more than 3,500 of its vehicles on the road and the accumulated data from more than 100 million km of user experience. Mahindra & Mahindra Ltd. Today strengthened its position in the Electric Vehicles domain with the acquisition of a majority stake in REVA Electric Car Co Ltd., Bangalore.
REVA Electric Car Co Ltd. will be renamed Mahindra REVA Electric Vehicle Co Ltd. Under the new agreement which was signed today by both the companies, M&M will own 55.2% equity in Mahindra REVA by a combination of equity purchase from the promoters and a fresh equity infusion of over Rs 45 crores (approx US $10 million) into the company. The buyout makes the Mahindra group a strong global player in the electric vehicle space.
Post the buyout, the Board of Mahindra REVA has been re-constituted under the chairmanship of Dr Pawan Goenka, President Automotive & Farm Equipment Sectors, Mahindra & Mahindra. The new board includes five nominees from Mahindra & Mahindra, two from the Maini family, and one from AEV LLC, California (co-founders of REVA). An independent director will be added to the board subsequently. Mr. Chetan Maini will continue to play a leading role in Mahindra REVA as Chief of Technology & Strategy and will continue to be on the board. Under its core Sustainable Mobility initiative, Mahindra has been working for the last 10 years on developing green technologies and has demonstrated diesel hybrid technology on the Scorpio and hydrogen Alfa three wheelers. Mahindra has a pilot fleet operating with 100% bio-diesel and was the first to launch micro-hybrid technology in India with around 50,000 such micro-hybrids on the road today.
In EVs, over and above the electric three-wheeler Bijlee developed in 1999, it is also currently working on an electric version of its mini-truck, Maxximo. Mahindra REVA’s EV technology will be adapted for these and other M&M vehicles. Access to strong EV technology will strengthen Mahindra’s other current sustainability initiatives. REVA is currently marketing its products in 24 countries across the world with an overall vehicle population of over 3500, arguably the largest EV fleet globally. REVA recently premiered its next generation electric car models, the NXR and NXG which received an enthusiastic response. Mahindra REVA will now have access to Mahindra’s vehicle development technology and distribution network, significantly enhancing its ability to launch a state-of-the-art electric vehicle for global markets. Speaking on the acquisition, Mr Anand Mahindra, VC&MD, Mahindra & Mahindra said, “With issues such as climate change and carbon footprint taking centre stage globally, eco-friendly transportation becomes the need of the hour.
Mahindra already has an established sustainable mobility solutions programme and our association with REVA will only help us further expand our green footprint both in India and overseas”. Dr Pawan Goenka, President (Automotive & Farm Equipment Sectors), Mahindra & Mahindra and the newly elected Chairman of Mahindra REVA said, “This is a key strategic acquisition for Mahindra in its march towards sustainable mobility. Mahindra and REVA bring together complementary strengths. With Mahindra’s vehicle engineering expertise, global distribution network, sourcing clout and financing support, REVA’s vehicles have the potential to significantly gain in market penetration. Mahindra will also benefit from REVA’s EV technology for its own products.”
Mr Chetan Maini, Chief of Technology & Strategy, of the newly formed Mahindra REVA mentioned, “The EV market is poised to grow significantly and they concluded that in order to seize the opportunity they needed the resources and experience of a major automotive manufacturer. In Mahindra they have found a company that not only shares our vision of principled and sustainable growth but one that also has a reputation for good corporate governance. As a result of Mahindra’s investment, Mahindra REVA will be able to scale, innovate and accelerate and so to deliver better products to more customers in more places”.
Mahindra & Mahindra Ltd (M&M) is the flagship brand of the $12.5 billion Mahindra Group, which operates with a portfolio comprising a wide spectrum of vehicles from two wheelers to heavy trucks, SUVs to school buses. M&M over the years has strengthened its position as one of the country’s premier utility vehicle (UV) and farm Equipment manufacturer with market share of over 50% in UV and 40% in tractors, respectively. It has recently entered 3-wheelers and CV segment. M&M is targeting sale of about 550,000 tractors in FY12E.
During Q2FY12 net sales of M&M surged by 37.6% to `73,068 million from the `53,113 million in the year-ago quarter, driven by 35.9% and 35.5% growth in its automotive and farm equipment segment, respectively. Though operating margins for the current fiscal are likely to stay under pressure under tight liquidity and rising input cost scenario, they expect the revenues of M&M to reach `300-320 billion in the coming two year.
At a time, when consecutive rate hikes, high inflationary data, strikes and costlier fuel prices have crippled the Indian auto sales manufacturers, M&M has emerged as the only automotive player to have beaten the slowdown comprehensively with a growth of 21% in 2011. Considering M&M’s aggressive growth strategies to expand its global footprint with a range of new variants in the four-wheeler segment, they expect M&M to mark 11-14% rise in its FY12E sales realization.
M&M complement the tag of no. 1 tractor manufacturer in the world in terms of volumes, occupying more than 40% of the domestic tractor market. With tractor demand fairly stable despite ongoing economical slowdown, the company is targeting sale of about 550,000 tractors next year. Beside, with the industry providing sufficient headroom for growth, they expect sales from the farm equipment segment of M&M to grow 17-18% by the end of FY12. M&M acquisition of SYMC Motors (SYMC) gives the UV product line of the company an extension into the premium SUV segment with an established foothold in the markets of South America, Russia etc. The management expects 50% volume growth at 113,000-114,000 units for SYMC in CY11 and aims to sell 160,000 units by 2013 and 300,000 units by 2015-16 from the unit.
During Q2FY12, M&M net sales surged by 37.6% to `73,068 million from the `53,113 million in the year-ago quarter, driven by 35.9% and 35.5% growth in its automotive and farm equipment segment revenue, respectively. Besides, the operating expenditure of the company increased by 43% to `64,866 million mainly due to the increase in raw material cost and employee expenses by 33% and 20% respectively. The strong volume growth across the vehicle and tractors segment despite of a difficult market situation and a tight control on expenses has helped lift the EBITDA by 6.3% to `8,202 million from `7,719 million in the corresponding quarter last year. Further, owing to the sharp rise in the interest and depreciation charges, the net profit margin (NPM) dropped by 375bps to 9.7%.
M&M’s standalone net profit at `7,374 million declined 2.8% from `7,585 million in the corresponding period preceding year, due to a foreign exchange loss. The company has suffered a foreign exchange net loss of `320 million, as the rupee fell 8.8% against the dollar in the July-September quarter. Going further, they expect the revenues of M&M to reach 321 billion in the coming two year, making a contribution of 950-980 basis points to its present EBITDA margins.
M&M’s November total sales volume in the automotive segment reported a robust growth of 53% (y-o-y) at 40,722 units, with a significant contribution of 38,159 units from the domestic terrain. A high volume growth of 46% in the passenger Utility Vehicles (UVs) segment led the domestic four-wheeler sales while sales volume in the three wheeler segment grew 32% during the month. M&M’s UV and three wheeler export during the month also grew 71% at 2,563 units against 1,500 units a year ago.
Meanwhile, M&M’s Farm Equipment Sector division reported a 3% fall in tractor sales to 17,527 units in November with domestic sales falling 5% to 16,175 units backed by issues related to the credit flow to the domestic farm sector. The company’s tractor export increased 33% to 1,352 units during the month against 1018 units sold to overseas market in the same period prior year.
At a time, when consecutive rate hikes, high inflationary data, strikes and costlier fuel prices have badly hampered the Indian auto sales numbers; M&M has emerged as the only automotive company to have beaten the slowdown comprehensively with a growth of 21% in 2011. Backed by significant demand for M&M’s premium sports utility vehicle, XUV500, the company is aggressively working to double its production to clear its order backlog of 9,500 units by January 2012. Considering, M&M’s ability to outperform the industry numbers despite strong economic headwinds and its proposed variants in both two-wheeler and four wheeler segment, they expect M&M to mark 11-14% rise in its FY12E sales realization.
M&M complement the tag of no. 1 tractor manufacturer in the world in terms of volumes supported by 1,300 dealers with over 2,200 service points, 7 tractor plants and 1 foundry. The tractor segment has been fairly stable during the ongoing economical slowdown and has registered a growth of 20% in the current fiscal. M&M with more than 40% share in the tractor industry of the country has gone a long way in keeping pace with the industry growth.
The company is targeting sale of about 550,000 tractors next year. Market share movements have been slower with a 0.5% to 1% change in a year. However, it was successful in penetrating newer villages that accounted 10,000 units in such markets. Growing focus in the tractor division will also provide further assistance to M&M as slowdown in rural consumption has not been experienced yet. Besides, the strong replacement demand will be a key support in the near term as it accounts for 40% of sales.
India’s tractor industry is well poised to register 10-12% growth in FY13 and with labor shortage driving the farm mechanization; the industry is likely to register a 20% growth in the coming three years. With the industry providing sufficient headroom for growth, they expect sales from the farm equipment segment of M&M to grow 17-18% by the end of FY12.
The quantum of tractors bought using cash payments has increased to 20-25% of sales in India, compared with 10% earlier, which reflects buoyancy in rural incomes. About 40% of the current tractor demand is from the replacement market. Though there is some concern about rural economy and consumption is slowing down, M&M has not seen any slowdown in rural consumption. Shortage in farm labour has also acted as a key catalyst for tractor demand. Tractors are no longer a luxury for the rich farmers, but a tool for better cost management.
In FY11, M&M registered domestic volumes growth of 24% led by new product launches and strong performance from existing product ranges. It launched Gio, Xylo, Thar, Maximmo, Yuvraj, Genio and Arjun MAT, during the year which is likely to power the company’s growth in future. Besides, M&M has also lined-up new launches, which would help bring additional volumes. It is ready to enter the market with a new SUV, 4-seater electric car, re-launch of Stallio motorcycle, two new versions of Verito, one SUV with SsangYong in India, aerospace components and mine protected vehicle (MPV-I).
M&M’s recently launched XUV500 SUV received remarkable response from the domestic consumers. Priced at `10.8 lakhs, the company has rightly positioned XUV500 in the market for people who desires something above `7 lakhs and below `15-20 lakhs. As a result, M&M’s the XUV500 has gone a long way to set a booking record of 8,000 units in just 10 days of being launched in 5 cities of the country.
Acquisition of SYMC Motors (SYMC) gives the UV product line of the company an extension into the premium SUV segment. SYMC has a distribution network of over 130 dealers in Korea and 1,200 dealers in more than 90 countries. The acquisition gives M&M access to SYMC’s popular product portfolio with an established foothold in the markets of South America, Russia, Eastern and Western Europe, and Africa which bodes well for M&M‘s plans to launch a global SUV this year. The management has guided 50% volume growth at 113,000-114,000 units for SYMC in CY11, with the recent launch of Korando-C. Thus, the acquisition of Korean company SYMC augurs well for M&M in the long term, placing it on a new growth trajectory.
As debt woes continue to plague one of its largest markets Europe SYMC is eyeing to enter emerging markets including India, China and Russia playing a bigger role in a bid to boost volumes in 2012 with a year-on-year volume growth of 40%. The company aims to sell 160,000 units by 2013 and 300,000 units by 2015-16.
M&M-SYMC have finalised a combined future product portfolio strategy, which will see 3 new platforms and 4 new products coming in from both partners. The new sourcing strategy for M&M-SYMC is being put into place, which will see both companies sourcing an enormous $20 billion of components over the next 5 years. This huge sourcing is expected to bring in economies of scale and reduce the cost for the duo.
Mahindra Navistar Automotives Limited (MNAL), which is a 51:49 joint venture between M&M and Navistar Inc., is planning to launch at least two new models—a 49-tonne tractor trailer and a 25-tonne tipper for the mining sector in H2FY12E. Intending to establish a pan India presence, the company further intends to increase its current 48 dealership across various cities to around 100 by adding 50 new dealers by the end of FY13E. With a targeted growth of 9% in the second half of FY12E, the company is planning to see cash break-even in the next 12 months. Further, the company is planning to invest around `2.50 billion to add few more variants in the heavy-duty goods commercial vehicles segment, which in turn will help the company ramp up volumes and use its factory capacity fully in the next three years.
The largest utility vehicle maker of the country is planning to set up an assembly plant in Southeast Asia in the next few years as a part of its strategy to expand its global presence through its entry to markets in Thailand and Indonesia. Currently, M&M exports vehicles to Malaysia and is aiming to expand to other markets in ASEAN region. Over the next four to five years, M&M sees at least 15-20% of its total export volumes coming from this region. In FY11, M&M exported 17,000 units of utility vehicles and pick-ups and around 11,000 tractors. The company is aiming to double overseas revenues to more than $1 billion by 2013 and is aiming two-fold increase in volumes to 100,000 units.
M&M is eyeing to launch its first compact car after it acquired Reva Electric Car Company in 2001. The SUV-maker is aggressively working to launch its first compact car in the country Reva NXR by 2012. With a mileage of about 9.6 km for every `3 spent, the Reva NXR, ensures nine times the mileage generated by the country’s most fuel-efficient petrol-powered car. At a time, when petrol prices are breaking new highs M&M expects its Reva NXR to seek significant attention from the consumers who spend `7,000-8,000 every month on petrol.
Beside, M&M is also establishing one of world’s biggest manufacturing bases for electric cars of 30,000 units per annum near Bangalore, which is likely to commence production in FY13. With increased demand for electric cars, M&M apart from its marketing strategy to sell its Reva NXR through an expanded network of 100 outlets in India, the company is also mulling over rolling its new electric car model in countries like Norway, which houses the highest consumer market for electric cars in the world.
After M&M lead development in the electric car market of India, many other car makers are also developing concept vehicles to cater to the emerging demand for Electric vehicles in India in the years to come. Polaris India, a major multi terrain vehicle manufacturing company is planning to introduce electric cars to Indian market. Considering the rising fuel prices, the impact on power and utilities companies of the electric vehicle market is likely to attain consumer attention in medium to long term.
The part of Indian automotive industry in Mahindra & Mahindra Ltd comprises of a number of Indian-origin and multinational players with varying degree of presence in different segments. Today, nine of the top ten global automotive manufacturers have a presence in India which clearly points to its importance as a strategic market. Similarly, the domestic tractor market also has a mix of Indian-origin and international manufacturers and is segmented by horsepower. While the automotive segment is doing well and has already clocked an average volume growth of 28% in April and May 2012, it may face problems in the form of policy decisions. The proposal to impose a higher excise duty on diesel cars/SUVs, which is yet to be implemented, is like a Damocles sword hanging over the company.
The differential in diesel pricing, which means charging less for transport trucks and more for diesel cars/SUVs, is another proposal that can make life difficult for Mahindra & Mahindra. Though the company cannot do anything about the monsoon, the management is taking several steps to revive growth in the farm segment and maintain a high growth rate in the automotive segment.
With this in mind, Mahindra & Mahindra is set to launch six new products, which will cover both the segments, during 2012-13. Mahindra and Mahindra Ltd, the only manufacturer of electric cars in India, plans to introduce at least five such vehicles in the next three years to take advantage of a government plan to spend Rs. 14,000 crore to boost the popularity of electric and hybrid vehicles in the country. Therefore Mahindra is considered at the top in the automobile sector as of date. The growth strategy adopted by the company will have a colourful future for the company.
Mahindra and Mahindra in Vehicle Industry. (2016, Apr 01). Retrieved from https://studymoose.com/mahindra-and-mahindra-in-vehicle-industry-essay
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