‘Right to win globally will come from EV products high on tech, and cutting-edge on design’
Rajesh Jejurikar, the Executive Director and CEO of M&M’s Auto and Farm Business, spoke with Autocar Professional about the company’s global ambitions.
Having marched ahead in the domestic market to lead in all its core segments — SUVs, pick-up trucks and tractors –, Mahindra & Mahindra (M&M) has charted out an ambitious globalisation strategy. The maker of XUV 700 and Scorpio N plans to grow its tractor business by 1.6 times and automotive business by 2.5 times in the next three years.
Already the world’s largest tractor maker in terms of volumes, M&M wants to make further inroads into many new geographies with its farm business. Its next big bets are pick-up trucks and electric vehicles (EV). The media got a sneak peek of both these concepts at a launch in South Africa on August 15. Autocar Professional caught up with Rajesh Jejurikar, the Executive Director and CEO of Mahindra & Mahindra’s Auto and Farm Business, on the sidelines of the mega event and spoke with him about the company’s globalisation vision. Edited excerpts:
How do you intend to achieve your mid-term target growth in international revenues in the farm equipment business and automotive business?
For us, the next stage of globalisation on the automotive side is around two pillars — lifestyle pick-ups and Born Electrics. But they will be rolled out in a phased manner.
The products that we have launched over the past two or three years — Scorpio N and XUV 700 — have not gotten into international markets fully yet. As a first step, with capacities coming in, they will be vying for a sizeable presence in our existing key markets of Australia, New Zealand, South Africa, and left-hand drives will go to Latin America.
In step two, the Born Electric vehicles will make their way into the right-hand drive markets like the UK. Step three will be to expand into left- hand drive markets, with EVs and pick-up trucks in the ASEAN market.
Born Electric vehicles are developed for global markets. In the EV world, you don’t have to be a brand for 30 years for the consumers to accept you. The acceptance of buying a new brand is going to be totally different. M&M will aim to be a tech-leading startup coming in and taking on the mainstream EVs with the right design and technology.
Under tractors, we have a set of strong international markets like North America, Turkey, Brazil and Japan. These markets are among the top tractor markets in the world. If you leave out China, M&M has a reasonably good presence there.
The two markets where we don’t have a presence are the ASEAN and European regions, which is where we want to enter with the Oja tractors. The new K2 platform-based products will help accelerate not only our existing core markets of India, North America and Africa, but also open up Europe and ASEAN for us.
Much like North America, we will look to seed the market with our tractors first, build the visibility around the brand, and eventually bring in new automotive products like the pick-up trucks and 'Born Electric' BEVs in ASEAN and Europe markets, respectively.
But both auto and farm are in different maturity cycles in the global markets.
Yes, that's right. In the farm equipment space, even as a global OEM, we are in the top four or five in terms of revenues. And as you know, we are the largest tractor maker in the world in terms of volumes. Clearly, the farm equipment sector business has already progressed a lot globally and it is easier to build and leverage on that. In the case of the automotive business, India is now the third- largest market in the world and as the home market becomes bigger, the ability to compete in the global space becomes stronger. That’s also what has happened in many other countries. If you look at China, when the home market became big, it allowed Chinese players to compete globally, thanks to the scale in the home market.
The Chinese and Koreans have had a reasonable size of domestic market and one has seen how they built their global presence.
Does domestic scale in automotive now give M&M the edge? You are the second- largest SUV maker.
I think in India, in tractors, we have had that advantage, which is now coming in for SUVs and pick-ups as well. As we now become a very large home market competing with all the global players, if you’re succeeding here, you’re doing something right because you have products of a global quality competing with the best in the world at prices that are affordable. That means your product maturity has reached a stage where you can go and start competing around the world.
North America is a key global market for M&M. How have you fared there?
Interestingly, in North America, Mahindra & Mahindra probably is the largest Indian B2C brand with a business exceeding US$ 500 to US$ 700 million with our tractors and Roxor. If you look at all the other Indian brands' presence in the US, no other B2C brand has the kind of awareness and presence that we have.
It surely has been a long journey. Building a brand is a long, arduous process for you.
As we think about going global, a key question is — how do we do it in a way that we don’t become just exporters, but start focusing on building our brand in each of these countries?
In a way, that’s what we’ve done in North America. The brand is not just known to a few stakeholders or investors who are globally aware. Rather, it is well aligned to the home market.
You should look at some of the advertising we’ve done in North America for tractors. It will show you the tonality. For the past 15-20 years we’ve been working with a North American ad agency and they’ve done work that really resonates well with the local audience.
We did the Rush Limbaugh show. He used to be a highly influential radio jockey and we had many sponsorship deals with him. Rush was very close to the brand; he would endorse it. After that, we moved to NASCAR. So, there’s a lot of advertising around the community.
This is how the brand has connected well at a local level, it’s a part of global thinking. Over the past couple of years, from Banbury, UK, in 2022 to what we’ve done now in Cape Town this 15 August, we’ve worked with global ad agencies in the UK. The creative work and all the videos shown in Cape Town and in Banbury, were done by the agency in London, which has given the brand a global tonality.
Despite legal hurdles, your Roxor now has a clear path to sale. What is your vision with the brand now?
A couple of years ago, we deliberated on how we should play in North America. In order to have a larger presence, we need to have a sharper focus on the rural lifestyle segment, which appeals to both our tractor and Roxor buyers.
The focus is now on building more on the rural lifestyle segment. So, what we’ve done now is we’ve made the front-end the same. Roxor earlier was going through a different team and we had a different channel. Now we’ve merged the team. So, the M&M North America team sells Roxor. So, it’s a similar channel, a similar go-to market and we derive synergies from the two. So, yes, Roxor will certainly be a focus for us as we go forward because it fits very well in the strategy of rural lifestylers.
Now that this whole story (legal case) is behind us, we can work on building the business with more confidence and no hurdles ahead of us.
Yet, it is a tough challenge to build brands in new markets amid global automotive bigwigs.
Which is why it is a very calibrated approach. We have invested in creating a network, brand, all of that in South Africa, Australia, New Zealand, Chile, North Africa, and so on. That will help us now.
The first phase of growth will just come out of existing products, which we’ve already designed. The brand or channel is set up; the brand has been seeded; you’re just getting much better products out of our portfolio going into those markets.
The next phase, which is going to the UK or Europe, is when we have to be very calibrated and that is where the right to win comes. And that comes out of having a differentiated, high-tech, cutting-edge design in these new sets of products in the EV space.
This interview was first published in Autocar Professional's September 1, 2023 issue.
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