Interview with Vivek Nayer, Senior Vice President, Marketing, Automotive Sector, Mahindra & Mahindra Ltd.

Company Description: Mahindra & Mahindra Limited (M&M) is an Indian multinational automaker headquartered in Mumbai, Maharashtra, India. The BSE-listed firm is India’s largest utility vehiclemaker and also a subsidiary of Mahindra Group conglomerate. The Automotive Sector has emerged as one of the leading arms of the Mahindra Group. It is in the business of manufacturing and marketing utility vehicles and light commercial vehicles, including three wheelers. Being a market leader in utility vehicles in India since inception, Mahindra currently accounts for about half of India’s market for utility vehicles. Over the years, the Group has developed a large product portfolio catering to a diverse customer base spanning rural and semi-urban customers, defence requirements and luxurious urban utility vehicles.

After coming up with the Bolero MUV, M&M introduced the Scorpio SUV, then the Xylo MUV followed by the XUV500. Do you now see the company maturing into a global automotive powerhouse?

We are a comprehensive player in all segments of personal and commercial utility vehicles. On the personal vehicle segment, there are Scorpio, Xylo, XUV 500, Bolero, Thar, Verito, etc. On the commercial vehicle space, we have Alpha (load and passenger variants), Gio (load and passenger variants), Maxximo ((load and passenger variants), pick-up trucks and Maxx Maxi trucks. Our aspiration is obviously going global, but our dominant market remains India. And we are the leaders in the utility vehicle space. We are already competing with the best brands from across the world in India.

Can you tell why the company has shied away from the hatchback car market, which essentially accounts for 70pc of the total personal vehicle parc?

This is primarily because our core expertise has always been in making utility vehicles. We were a jeep company around the time of independence. We used to manufacture and market jeeps sourced from Chrysler. That has always been our DNA. So we make rough and tough UVs and SUVs and have been the market leader in such segments. Even in the pick-up vehicle segment, our marketshare is around 70pc.  As far as the Mahindra Verito (the rebadged Mahindra Renault Logan) is concerned, it is an opportunistic move and is doing pretty well.  We came out with a new campaign, styling etc. for the sedan and are happy with its response.

‘Mahindra’ as a brand is finding its way across all kinds of vehicles. You have heavy CVs with Mahindra Navistar, SUVs like the Scorpio, XUV500, LCVs like the Maxximo, and also Alpha 3-wheelers. So taking a cue from your peers (Bajaj), would you like to drop the ‘Mahindra’ tag in order to create each vehicle’s unique identity?

I think the ‘Mahindra’ brand stands for a lot of trust reposed by our customers in us. As far as our products are concerned, ‘Trust’ is very important for our consumers. Mahindra as the parent brand is the endorsement and reassurance of the trust factor. But we also have product brands like XUV500, Scorpio, Bolero, Xylo, etc. So each product in our portfolio is a value proposition on equity. Mahindra is an endorser of such products.

It’s a known fact that in order to revive sales, most of the carmaking companies are coming out with new products. What can we expect from M&M’s end as far as future product plans are concerned?

You just need to see our past records. We had launched XUV 500 last year and have recently opened the third phase of its bookings. We garnered roughly 17,000 orders in a market scenario where the sentiments are down. Moreover, the product commands a price tag of 13-15 lakh. So we are very happy and satisfied and at the same time very grateful to our customers to repose so much confidence in us. If you look at our other launches also like the Xylo refresh a couple of months back, we have got a favorable response. We came out with a new campaign for the Xylo refresh with Atul Kasbekar. We have launched the refreshed Xylo with a new top-end variant i.e. E9, which has the Mhawk engine and is equipped with class-leading features like ‘Voice Command Technology’ et al. In fact, we have not been able to supply adequately because of its excessive demand. So our recent launches have done well. Going forward, we have some launches planned in the next one year. As we have announced earlier, a compact SUV and Rexton will be launched by Diwali.  We will also come with a sub four-metre Verito sedan by the end of this financial year. So these are the launches we have already announced. And of course now we have launched the Maxximo CNG in Delhi.

A couple of years back, M&M took over Reva. So when can we see products from your Reva portfolio? And when can we expect electric variants of your existing lineup?

As I don’t look after the Reva’s business, I am not in a position to offer any comments on its upcoming products. However, we may use the Reva technology in our existing products. We have already done some technology demonstrator products in the past and have shown that at the Auto Expo as well. But you have to wait and see as and when that happens as we can’t put a timeline to that.

Of late, Mahindra is getting into a lot of motorsports activities. So do you think ‘motorsports’ will catch up fast in India? And how will it help the Mahindra brand?

‘Mahindra’ as a brand has been built on the DNA of a tough and rugged nature. So we wanted to provide an experiential event for our customers. I think for the last 15 years we have promoted the Mahindra Great Escape. And now, we have scaled up those events and have formed the ‘Mahindra Adventure’ initiative which is led by Bijoy Kumar. So under ‘Mahindra Adventure’, we not only have many great escapes but have also included special multi-day escapes, TSD rallies, motorsports events, etc.  We have put in teams in the Dakshin Dare rallies where we got the first and second positions with the XUV500. So it is part of the whole ‘Mahindra Adventure’ offering that we have. Going forward, we would like our customers to experience more and more off-roading because it’s a lifestyle proposition that we are offering.  Once people enjoy that kind of a lifestyle, they will buy Mahindra vehicles which are tough and rugged and that will ultimately help us. We are offering a lifestyle choice to enable them to have the freedom they get which is not there with cars.

Do you see any change in buying patterns amongst car buyers in India? And is the youth a big influencer of purchasing your products?

I think car buyers are becoming very lifestyle conscious. Their aspirations are high and therefore there is an unprecedented demand for premium products like the XUV500 and the Scorpio. Their standard of living is also going up. So people are making choices based on that. Internationally, SUVs contribute about 30-40pc of the total car market.  This trend is prevalent in markets like East Asia, Europe, America, etc. In India, that ratio has traditionally been very small, say at 15pc. But we are expecting that contribution to increase and Mahindra will also benefit out of that.  And yes, the average age of buying a vehicle is also coming down. But the most important factor is the influence of youth has on buying decisions today. Mahindra has been one of the pioneers in the digital market space. We started actively pursuing the digital platforms about two years back and are already on social media like Facebook. We have more than 5 million fans interested in our brand and products. It’s like having your own TV channel or a national newspaper. These fans are not forced to join our community but have chosen to be there on their own. So these people are the big influencers of today and potentially the buyers of tomorrow. We are very much engaged with them by carrying out a lot of activities with them on the social media. And they are the promoters of our Scorpio, XUV brands. You can read their comments on how they love our brands and engage themselves in consumer contests. So the youth is certainly a big influencer of purchasing our products.

As the interest rates are going up, will your finance arm ‘Mahindra Financial Services Limited’ contribute significantly by offering competitive rates of interest?

Mahindra Financial Services Limited (MFSL) is operating in a macro environment. If the overall rates of interest are high, that’s an overall economy issue. So if the overall rates of interest come down, everyone will offer a reduced rate of interest. Having said that, we have a big advantage in getting the support of MFSL, which is our sister company. It benefits our customers in both CV and personal vehicle segments. Since MFSL’s rural market penetration is so huge, we get the upper hand in financing our CV. And many of these small CVs sell in small towns and rural areas. It really is a competitive advantage that we have.

Lastly, what marketing strategies have you outlined in the automotive division of Mahindra?

I aim to have stronger value propositions for our brands to be offered to our consumers like the way we have done with the XUV500. I also intend to have more and more engagement with both our customers and fans through the use of new and emerging media. I would also like M&M to have a portfolio of products which is has a varied range of positioning that are differentiated so that we bring a different costumer segment into the fold. Lastly, we also aim to have a good innovation product pipelined in the future. These are the pillars on which the marketing success of Mahindra’s automotive products will rely.