Home and the World: Mahindra charts out renewed global ambition

Mahindra & Mahindra’s ‘Strategy Refresh’ from FY24 to FY26 is part of its focus on globalisation and will involve emerging businesses being put on track to conquer overseas markets.

By Ketan Thakkar calendar 08 Sep 2023 Views icon10060 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Home and the World: Mahindra charts out renewed global ambition

During a recent visit to North America, Rajesh Jejurikar, the ED and CEO of Mahindra & Mahindra's Auto and Farm Division, was asked by the immigration officer about the purpose of his visit. Jejurikar replied that he was on a business trip to Houston, Texas, for a review meeting of Mahindra Tractors business. The enthused officer replied that he was well aware of Mahindra Tractors and was in fact keen on buying one. Pleased, Jejurikar passed on the lead to Mahindra USA officials. 

The interest in the brand among US customers should not come as a surprise; as Mahindra has become one of the top three preferred brands in the hobby farming space in North America, and it is also the world’s largest tractor maker in volumes.

Mahindra & Mahindra (M&M) has been in the US market for almost three decades. So it has in some ways become a part of the local socio-economic fabric for a while now. In fact, M&M is one of the principal sponsors of a racing team at the popular NASCAR rally in the US and the Rodeo competition to connect with its local audience which has enhanced visibility. 

Jejurikar says such events and marketing campaigns have given the brand a global tonality and helped it make a mark on the psyche of many lifestyle tractor buyers. Not surprisingly, Mahindra is probably the biggest Indian B2C brand in North America, generating a revenue of $500-700 million. 

Hemant Sikka, President of the Farm Equipment Business, tells Autocar Professional, he is confident of the base crossing a billion dollars in revenues in the next few years as the company is targeting the rural lifestyle segment with both its new range of Oja tractors and Roxor off-road vehicles.

Today, North America is one of the key beachheads for Mahindra & Mahindra’s new globalisation strategy, announced by the MD of the group, Anish Shah. The group wants to replicate its show in the US in markets such as the UK, ASEAN, Brazil and Africa in the coming decades.

According to the new plan, the target is to grow the global tractor business 1.6 times by FY26 and the global auto business 2.5 times, albeit on a low base. This means the international farm equipment business revenues could be US$ 1.5 billion to US$ 2 billion, and the automotive business revenues could be US$ 150 to US$ 200 million: the latter can cross one lakh units in volumes.

Recapping the recent strong performance, Shah had asserted at the FY23 earnings conference that all its businesses have delivered more than the expectation and much ahead of the scheduled time. 

With its core business transformed and the growth gems or emerging businesses being put on track for faster growth, Shah has put in place a “Strategy Refresh” for three years — FY24 to FY26. This plan is based on the strategic focus of delivering scale through market leadership, resilience amid volatile business environments and value.

With its new range of Oja tractors developed for the global markets, M&M not only hopes to grow in its core markets of North America, Latin America and Africa, but also hopes the lightweight tractors will open up the large markets of Brazil, ASEAN and Europe.

On the automotive side, it is about leveraging the product portfolio of XUV 300, 700, and Scorpio N to penetrate the markets of South Africa, Australia, New Zealand and some of the key LHD markets in Latin America, before the global pick-up trucks and Born Electric Vehicles hit the markets of the UK, Europe and ASEAN.

The thrust on the international business happens at a time when M&M has been able to grow and consolidate its leadership in the domestic markets of tractors, pick-up trucks, electric three- wheelers and SUVs. This new plan has been very well thought through and curated, keeping in mind key bench head and assembly bases, new range of product portfolios and the time of entering markets, say senior company executives.

This feature was first published in Autocar Professional's September 1, 2023 issue.

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