Mahindra top management restructures two-wheeler business

Mahindra Two-wheeler’s top management has said that the company is developing new variants on the Mojo platform, among a host of other initiatives designed to drive growth.

Amit Panday By Amit Panday calendar 25 Oct 2016 Views icon44772 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

Mahindra & Mahindra (M&M) today announced that it has restructured its two-wheeler business with some hard-pressed decisions that include cutting down the marketing spend by up to 80 percent, reducing manpower by almost 50 percent, and driving a new product plan going forward.

At a press meet today in Mumbai, Dr Pawan Goenka, executive director, M&M, said: “We had three options before us for our two-wheeler business – continue investing, shut down all operations or reorient and restructure the entire business. We chose the third option.”

“The restructuring will see three new pillars of M&M’s two-wheeler business going forward. These will include Peugeot MotoCycles (PMTC), Mahindra Two Wheelers (MTWL) and Classic Legends,” he added.

Although the move to induct the BSA and Jawa brands under its two-wheeler umbrella clearly indicates the Group’s intent of making inroads via co-creating new premium lifestyle brands, the restructuring has hit the existing setup the most.

Disclosing details in the context of restructuring the MTWL operations, Rajesh Jejurikar, president and chief executive, Farm Equipment & Two-Wheelers, M&M, said: “We have cut down our marketing spend on the two-wheeler business by 80 percent. We now plan to focus only on BTL (below-the-line marketing activities) to support sales of our existing products. We have also reduced our manpower by almost 50 percent. While some of them are absorbed under other M&M businesses, we had to let the others go. We will continue to manufacture the Centuro motorcycle and Gusto scooter at our Pithampur plant as per the demand. However, going forward, our focus will be on the premium segment via the Mojo, which, in terms of brand awareness, has done well for us.”

The restructuring at MTWL has also impacted its retail footprint. Responding to a query from Autocar Professional, Vinod Sahay, CEO, MTWL, said: “We have a new focused approach for our retail footprint in India. We had a retail network of 450 dealerships. Going forward, we will have close to 350 dealerships.”

New Mojo variants over 2 years

In the coming two years, Mahindra Two Wheelers’ business will see focused efforts on the front of the Mojo, which is currently available across 22 cities in India. MTWL plans to add another 10 cities to the Mojo’s current distribution footprint in a few months.

Defining its future direction, MTWL’s top management has said that the company is developing new variants on the Mojo platform. While the new variants to the Mojo will ensure a wider price range of the brand, it clearly targets boosting its existing sales performance in the market.

According to Jejurikar, the company will roll out new variants of Mahindra Mojo over the next two years.

On the other hand, the top management also clarified that the premium brands including BSA, Jawa and PMTC will bear no association with the Mahindra brand on the front end. The development of new motorcycles branded under Jawa, however, will have synergies with the existing MTWL R&D and manufacturing capabilities.

While the new product development under the Jawa brand will see a new team operating out of MTWL’s R&D centre in Chinchwad (Pune), the production will utilise the capacity at the Pithampur plant in Madhya Pradesh. The company is looking at a two-year timeframe for its plans under the Jawa brand, which will be focused on India and neighbouring markets, to fructify.

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