Mahindra & Mahindra (M&M) - the largest utility vehicle manufacturer- has been constantly increasing its presence in the international markets. M&M recently unveiled its Genio pick-up van for the foreign markets, while its XUV 500 model is all set to hit the global roads soon. The company has identified some strategic markets where it is investing heavily on brand building. China and the US are the most important markets for the company’s farm equipment like tractors, while, for its vehicle segment the major markets are Chile, South Africa and neighbouring countries. Pravin Shah, chief executive, international operations, Automotive and Farm Equipment sectors, Mahindra & Mahindra talks to DNA on the company’s export strategy. Excerpts:
A lot of attention is being given to the exports market by M&M. What is the company’s expansion strategy with regard to international markets?
People who want to go global
should understand how they can actually leverage the platforms available with the organisation and how they can have more variants of the existing platforms in order to address the global markets.
For us, if you take the Genio, which we launched for the international markets, is based on the Xylo platform. But the vehicle is completely different from what is available in the domestic market. The driveline is different, interiors are different, and emissions levels are more economical as per the requirements of a country.
Similarly, when the new global sport utility vehicle (SUV)—XUV500—will be introduced, we will have different variants. All this happens at the design stage where we keep all such options possible.
At M&M, we want to be a globally recognised SUV and pick-up player and we have a robust plan for the geographies where we would like to have our presence felt strongly. This is in addition to the long- term markets where we are already operating. Hence new vehicles like Genio pick-up, XUV500 and various other products which are on the pipeline, will help us expand our presence further.
What kinds of variants are possible on the XUV 500 platform? Will the new variant cater to domestic or international markets?
Right now it is too early to talk about the new variants but we are looking at all options. When we develop a product we also try and see what incremental efforts are needed to make the product suitable for domestic as well as international markets. That has been the strategy for Mahindra.
What are your plans for the Genio variant? Which countries will it cater to?
Firstly, the product will be launched in South Africa at the Johannesburg International Motor Show and simultaneously it will also be launched in India look-alike markets such as Sri Lanka, Bangladesh, Nepal and Bhutan. We will also take the product to some of the Latin American markets like Chile and Peru. In the next phase we will focus on Europe and Brazil.
Secondly, At M&M, we follow a strategy keeping in mind the long- term returns of any market that we enter. Even if the market is destabilised, we do not give up easily. For example, we started off in South Africa in 2006, and in 2007 and 2008 we did well. However, in 2009-10 the whole economy was affected, due to which we made substantial losses but we never quit the market because of it being a long -term market.
That’s the philosophy we have adopted. We do not force feed any product. We study the market dynamics, the requirements and bring it back home and see how it can be suitably adapted. Then test run the product and when we find that everything is fine, we look at what is the best way to enter that market. We ensure we have spare parts and trained people in place, etc. These are things which will help in creating the brand Mahindra.
How is the company planning to place XUV500 on the global platform?
The name - global SUV -- suggests that the product is focused on the global markets as well. XUV 500 was designed keeping in mind the requirement of global customers and will also ensure that it will give us a leeway in our home market to fight the competition, which you see in the C and D segments.
Currently, what are the company’s important international markets?
Sri Lanka is one of our key markets wherein we sell almost 1,000 vehicles a month. In Chile we sell almost 400 vehicles a month, which is our second biggest market. We sell in hundreds in Nepal and Bhutan. In South Africa we have a substantially good volume and also in some African market.