M&M on an ambitious globalisation drive, eyes 1.6x growth in farm business and 2.5x growth in auto business by FY26
With expanded capacity, the company plans to sell its fast-selling vehicles XUV300, XUV700 and Scorpio in existing overseas markets, in phase 2. Company to add EVs in markets like the UK and other right-hand drive markets.
Having grabbed revenue market share leadership in SUVs in the domestic market, Mahindra & Mahindra, the maker of Scorpio and XUV700, is now charting out an ambitious internationalisation plan.
Speaking to media post the Q4 FY23 earnings, Rajesh Jejurikar, Executive Director, Mahindra & Mahindra, said the company plans to expand its global farm equipment business by 1.6 times and the automotive business by 2.5 times by the end of FY26.
Going global for the automotive business is part of a long-term strategy, which will be executed in the coming decade in three different phases, informed the company.
In the first phase, it will supply existing models - XUV300, XUV700, and Scorpio in the current international markets - which are receiving great interest from multiple markets. In the second phase, the company will cater to other important right-hand drive markets like the UK, with its range of electric vehicles (EV) in the mid-term, and add new markets, and in the third phase - i.e - post 5-7 years, the company will develop left-hand drive models of its EV line up, which Jejurikar feels will compete well with the global models.
"There is a significant demand for our products in many of the overseas markets at present, as the new capacity comes on stream, we will look at serving some of those international markets and eventually build our EV exports portfolio," added Jejurikar.
Defining the new Refresh Strategy of Mahindra Group in the coming years, Anish Shah, the MD and CEO of Mahindra & Mahindra said, “Thanks to the strong outperformance in the last few years, Mahindra is back to being the number 1 company in terms of delivering returns in the 20 years.”
Reviewing the past few years, Shah said, “The company created a sharp strategy and executed it well with a strong capital allocation policy. M&M transformed its core, exited loss-making business, and established growth gems which are on a path towards US$1 billion valuation”.
“We have delivered and built the foundation for growth. India is well positioned across global macro trends to make world-class products at scale and Mahindra's post is well positioned to capitalise in this shift," added Shah.
On a specific query on the internationalisation of brand Mahindra, Shah said, “The metrics of 1.6 times and 2.5 times are still very modest, Mahindra’s ambition to grow internationally is much more”.
While the automotive exports were minuscule at about 10,000 units, as the focus was on serving the high demand in the domestic market, where the company had pending bookings of over 2.92 lakh units at the end of the last financial year. But once the capacity is built to 49,000 units from the current 39,000 units, it will start accelerating its internationalisation plan, assured the management.
As for the Farm Equipment Business, which has had a stronger global presence, with almost a third of its revenues coming from overseas markets, Mahindra & Mahindra informed that it will rely on its new-gen light platform – K2 – branded OJA to expand into South Africa and other South East Asian markets, beyond building volumes in some of the new markets like Brazil, where the brand’s acceptance has been very high.
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