Mahindra gung-ho on Europe foray
14 Feb 2007
Pravin Shah is all smiles at the Paris Motor Show. The executive vice-president (auto sector) of Mahindra & Mahindra has his company’s new range of vehicles on display and is quite pleased as curious visitors stop by to have a closer look. “Europe has been a good learning ground for us in terms of buyer expectations, entering the market and the kind of product that is suitable for countries here. Back home, all these inputs are helping us in the product development process and in planning effective distribution channels for a brand like M&M which is still relatively unknown here,” Shah tells Autocar Professional.
The company, he adds, has now evolved robust market entry processes and is proud of the fact that its vehicles are part of France, Italy and Spain. Western Europe is a critical part of its overall global strategy. As Shah is quick to point out, a lot of hard work has gone into making this a reality. “We first try out the products in what we call RWU (real world usage). Rigorous tests are carried out to ensure that it can stand up to true global standards. If the product is successful in India, it does not mean that it will be the same overseas,” he says.
Before despatching products to global markets, M&M makes sure that critical parameters are in place. While identifying potential markets for its products, it considers all aspects like emission norms, safety etc before making a decision. By the end of the day, it is important to have a sustained presence in any country. The Mahindra Goa pick up range that was on display is not sold in India and has been developed specifically for Europe. It has followed all product development processes that are required in the continent.
The brand Mahindra is integral here but the Scorpio suffix will not work because it is after all the registered brand name of Ford. This is how Goa entered the picture in Europe. The pickup was first launched in South Africa in mid-April followed by Europe. M&M plans to go to other markets in due course of time. ASEAN is also part of the roadmap but there are product features that must be incorporated like automatic transmission which are common in Malysia, Indonesia and the Philippines.
The company will also look at South America in the future. “We already assemble the Bolero range in Uruguay and want to expand the product offerings for that region. It is a small market but we created an industrial base. Uruguay is part of the Mercosur trade bloc comprising Brazil, Argentina and Paraguay where there is free movement and we could explore opportunities here,” Shah says. Interestingly, Turkey is also on the radar. “It is a mature, sizable market and we are looking at this seriously in the long-term. We could create a manufacturing base if the need arises,” he adds.
At present, exports account for five percent of M&M’s turnover and the target is to reach 20 percent by 2015. Increasingly, automobile companies are looking at new global markets to beef up their business. In some cases, it is also the cyclicality of the business that prompts them to make this move. This is especially true for commercial vehicles and the only way to insure oneself against a fall is to have an option. This would be markets other than India and explains why manufacturers like M&M and Tata Motors have been getting into top gear with new markets across the world.