The success story of the automobile giant called Mahindra&Mahindra.
Mahindra happens to be a prominent name in the Indian automotive industry and as a part of this business review from JustInReviews, we will try to uncover its journey to the top.
Twenty-one years of existence, M&M’s income has grown 25 times and reached Rs 43,838 crore from Rs 1,715 crore; profits have risen up 55 times to Rs 3,758 crore from Rs 68 crore then. (The Mahindra vehicles and farm tools business represents near to 66% of its total revenues) Also, the brand has turned into the biggest tractor producer on the planet apart from ruling the Indian SUV segment in which relatively every major worldwide car manufacturer is battling for a share. The most critical change has been: Moving ahead on solid product development capacities, M&M has figured out how to dispatch a variety of successful products amid this duration.
Along with Mahindra cars, the brand has also carved a niche for itself in the two wheeler segment. That includes both motorcycles and scooters.
Pawan Goenka, president and executive director had not anticipated that M&M’s R&D facility would be of the level of General Motors which, in the mid 1990s, had a yearly budget of $1 billion and additionally a team of 20,000 engineers spread over different locations. In any case, nor was Goenka ready for the ground reality in Nashik. Considering that the research department was simply a shed and had just 50 engineers. “I must admit that the starting point was a lot less than what I had imagined,” states Goenka.
Mahindra enlightened him how the nation’s financial liberalization and potential rivalry from worldwide players had left M&M, a producer of pick-up trucks and jeeps for the rural segment, with three choices: Exit the automobile sector, turn into a licenced maker for another organization or build own products. “We have chosen to develop our own products and compete with the world. I am looking for somebody to undertake this big task. You will have all the freedom. Just give me a product in a reasonable time,” is what Mahindra stated to him.
A face changing step:
It required time yet vehicle major M&M finally brought its South Korean counterpart, SsangYong, headed for a financial turnaround.
SsangYong, acquired by the Indian utility vehicle and tractor giant for a price of Rs 2,100 crore (Rs 21 billion) back in 2010, has revealed a net profit of 23 billion South Korean won (Rs 128 crore) amid the nine months finished September – the first timer since 2007. In 2015 (Jan-Dec), the loss amounted to was 61.9 billion won.
Goenka, additionally the chairman at SsangYong, expressed that the focus post acquiring had been on essentially invest into new products, brand and market development, cost cutting and the capacity to infer collaborations with Mahindra in different aspects, e.g. platform sharing, R&D and sourcing.
A strategy that helped the brand reach where it is today. Not to forget the contribution of Mahindra dealers as well.
That’s Mahindra for you from JustInReviews. Get to read business news as well.
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