Mahindra & Mahindra in USA

Opening up of the Indian economy in the year 1991 made Indians wealthier. But it was a tough time for many Indian companies. When the automotive sector was opened for the foreign players in 1993 then many Indian companies had to fight for survival.

M&M (Mahindra and Mahindra) better known for its prowess in tractor making too had to face stiff competition. Perform or perish was the mantra. M&M sensed the opportunity in the Utility Vehicle (UV) and Sports Utility Vehicle(SUV) segment and came up with Scorpio and Bolero. Undoubtedly the move has paid and today these two vehicles have occupied numero uno position in the UV/SUV segment in India.

Just look at the statistics:

• Total number of UV and SUV sold in India till March 2008: 288,601.
• M&M sold 148,761 i.e. 51.54%.
• Out of these Scorpios sold were 39,935.
• Automotive division of M&M contributes 61% in the company’s revenue.

M&M’s Boleros, Scorpios and Scorpio pick-ups have gained popularity in South Africa. In the last three years M&M has sold around 9000 vehicles in South Africa worth Rs 301 crore.

Total number of vehicles exported by M&M to Egypt, South Africa, Chile, Sri Lanka, Europe, Brazil and Nepal in the fiscal year 2008 was 12,000.

M&M now wants to enter the US market as it believes that there is a niche for them in the mid-size SUV segment.

New Move:

• M&M is set to foray into the US market.
• Target: To sell 10,000 vehicles in US in the year 2009.
• Will spend Rs 200 crore to upgrade Scorpio for the US market.
• Vehicle will be powered by mHawk engine
• Vehicles will be T2B5 i.e. Tier 2 Bin 5 compliant-the emission standard which automobiles have to comply with in USA.
• Will position itself in mid-size SUV market.
• Will spend Rs 200 crore on promotional campaign.
• Wants to create a niche for them in the US automotive market

Honda’s CR-V and Toyota’s RAV4 will be the main competitors for M&M. The US consumers are very demanding. They are brand conscious. How enthusiastically they will accept a product that to from India only time will tell.