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.