Mahindra Scorpio may come soon to US and UK markets

[Saddle Bronc 124]

http://business.timesonline.co.uk/tol/busi...icle1945670.ece

Time to put India’s new business challenge on the road

The subcontinent’s largest tractor manufacturer has ambitious plans to break into the world market for SUVs

June 18, 2007

Ashling O’Connor in Bombay

Not so long ago the idea would have been not so much off road as off the wall, but as Indian industrialists make inroads into the Western business world it is not such a shock that a new rival to the Land Rover should hail from the sub-continent.

While Ratan Tata and Vijay Mallya have stolen the headlines with acquisitions in the British steel and whisky industry, a host of home-grown Indian businessmen are ploughing profitable furrows in the world’s fastest-growing economy after China.

As managing director of Mahindra & Mahindra, a $4.5 billion conglomerate that includes India’s largest tractor manufacturer, Anand Mahindra has been doing so almost literally. Every second tractor sold in India, where two thirds of the 1.1 billion population works in agriculture, bears the company’s logo. Now he wants that badge to be seen on British roads on an Indian-made sports utility vehicle (SUV) with ambitions to be a cheaper alternative to the Land Rover.

The Scorpio is commonplace in India, where an off-road vehicle can come in handy on the notoriously bad roads, even in the middle of cities. It has been well reviewed in general by an audience with rock-bottom expectations from Indian carmakers, who are not known for the very highest quality and safety standards. In the process, including some fine-tuning, it has set a bench-mark for a young industry.

Mahindra has gained undisputed dominance of the Indian SUV market, with a 70 per cent share. In the past five years, sales have jumped from 65,000 to 170,000. Its exports are small, accounting for just 5 per cent of sales, but Mr Mahindra plans to take the group’s SUVs, pickup trucks and Jeeps to more markets. His export target is 20 per cent of the company’s sales.

“We are not about to be General Motors, and who would want to be? The logic for being the largest is not so obvious any more,” he said. “A specialised business is sometimes much more desirable. Why can’t we be the next Land Rover of the world? We have a much better chance of building a recognisable global Indian brand by sticking to our knitting, which is off-road vehicles.”

Mr Mahndra has a vision that takes in the Australian and American markets, too. “We are certainly not selling a premium vehicle but one that’s great value for money,” he said. “A lot of people think cars have become too expensive and I think Indian engineering enables products to be sold with a large portion of what they expect in a modern car, but at a much lower price.”

From about $18,000 (£9,000) on the road in India, the Scorpio is pitched at the lower end of the American market, the world’s largest for SUVs. Yet Mr Mahindra thinks that he also has an edge in environmental efficiency. The company’s hybrid Scorpio, running on a diesel engine and electric power, will be marketed as a “guilt-free SUV”.

He said: “The green strategy is key. People do not necessarily want to sit in a bug that can get squashed. They would love to have an SUV, but don’t because there is so much guilt about consumption. The Mayor of London would love it.”

Mr Mahindra has not decided when to launch in the UK, where the company has a history. There is a loyal following for the CJ-5, a civilian version of the Second World War Jeeps beloved of GIs. “We have a residual Mahindra club in the UK who meet once a year for a rally,” he said. “They occasionally cry for help for spare parts and we help them out.”

A 52-year-old scion of one of India’s most respected conglomerates, he took over the day-to-day running of the company in 1997 and is part of a generation of Indian businessmen who inherited old-school enterprises and invigorated them with modern thinking.

Mr Mahindra’s bread and butter may be trucks and tractors but he has ensured that the group has a foot in the new world, building technology and financial services arms. The company is developing a biotech park and has joined forces with an aeronautics specialist to design a commercial executive jet.

A graduate of Harvard Business School, he has taken the company into a three-way agreement with Renault and Nissan to build a $900 million passenger car plant in Madras. The facility, in which Mahindra owns 50 per cent and which represents the largest auto investment in India, will start producing 400,000 cars a year from 2009, but has a capacity of 800,000.

The carmakers will compete in the market and for extra space on the assembly line, sharing production and sourcing costs to minimise financial risk. “We borrow scale through our joint ventures,” he said. “The analogy is a multi-cylinder engine – our businesses – and the engine block is our common procurement. By teaming up with Nissan and Renault, each is getting a much larger plant than we would have been able to do on our own.”

Renault and Mahindra also have a separate joint venture to produce the Logan, the Indian company’s first foray into the passenger car market. With sales in the first seven weeks of fewer than 2,800, it may prove too cheap even for Indian consumers, who increasingly can afford foreign brands, but Mahindra wants a share of India’s car market, which is growing at more than 16 per cent. Export sales are predicted to grow from $1.8 billion in 2004-05 to $5.9 billion in 2008-09. The company has spread its wings, too, to become a player in the European forging market for car components.

Yet Mr Mahindra is not ready to bet the farm on the passenger car market. His biggest latest purchase was Punjab Tractors in a $540 million deal that cemented its dominant position in acquisitions in the market, which Mahindra has guarded for 24 years.

“We have always said we are going to be a specialist maker, but if we foray we will do it with partners,” he said, before turning his attention to his secretary’s annual appraisal. He may be hands off, but some jobs even he won’t delegate.

C.V.

Age 52

Married to Anuradha, who edits Verve, Bombay’s society magazine

Education JJ School of Architecture, Harvard College, Harvard Business School

Career Joined Mahindra Ugine Steel Company as assistant finance director. Appointed deputy managing director in 1989. Appointed deputy managing director of Mahindra & Mahindra in 1991; became vice-chairman in 2003

Interests A keen follower of sport and a member of the National Sports Development Fund

Hey, I would love to have a Scorpio or Bolero with Turbo-CRDI; adequate bhp (though by no means a racer) and torque, reasonable (say about 12 km/L or 30 mpg) fuel-economy, large safe vehicle.

[JanaknJanet 1]

OH MY GOODNESS.. you should have heard my daughter Squeellll...

She has been sooo talking to Jan telling him he should bring a Scorpio with him ....

Jan's Brother is a Exec for Mahindra & Mahindra... seems he is always having some new car every other week or so hahaha.. still .. my daughter fell in love with all the pic's we have seen.. I have teased Jan that for our wedding gift .. his bro should gift us with a car... hahah.. HMMMM if this is really the future plans...sure would be nice... ..

Who knows what it can lead to...

[JanaknJanet 1]

if you want to look at a Scorpio...

Mahindra Scorpio

[Mr. Big Dog 10,747]

Just what the world needs: another useless gas guzzler.

[Portlander 0]

The Scorpio is commonplace in India, where an off-road vehicle can come in handy on the notoriously bad roads, even in the middle of cities.

This sounds like San Antonio....

[mawilson 2,133]

Hey, I would love to have a Scorpio or Bolero with Turbo-CRDI; adequate bhp (though by no means a racer) and torque, reasonable (say about 12 km/L or 30 mpg) fuel-economy, large safe vehicle.

Buy the 34mpg Ford Escort Hybrid SUV.

[Saddle Bronc 124]

Hey, I would love to have a Scorpio or Bolero with Turbo-CRDI; adequate bhp (though by no means a racer) and torque, reasonable (say about 12 km/L or 30 mpg) fuel-economy, large safe vehicle.

Buy the 34mpg Ford Escort Hybrid SUV.

Mistakes in your post:

• Ford = Fix Or Repair Daily
  
• Escort = because it always needs a tow-truck as one
  
• I've only known two desis who've had Escorts--both ABCD's, and neither exactly satisfied
  

:lol:

Edited June 25, 2007 by CherryXS

[mawilson 2,133]

[*]Ford = Fix Or Repair Daily

Cherry - foreign cars break down just like American cars. The difference is not nearly as

dramatic as import lovers would like to believe.

[*]Escort = because it always needs a tow-truck as one

Sorry - I meant Escape (SUV), not Escort (sedan).

(mags has an Escort.)

[*]I've only known two desis who've had Escorts--both ABCD's, and neither exactly satisfied

You could be #3.

[Saddle Bronc 124]

[*]I've only known two desis who've had Escorts--both ABCD's, and neither exactly satisfied

You could be #3.

Why should any ex-FOB consult ABCD's in regard to car choices?

(I've test-driven an Escort in Calgary, in July, and was convinced it would perform poorly on the -30^o days which aren't exactly unknown in Calgary winters; plus its just-plain-lousy ergonomics--FYI, Ford has never learned to make anything smaller than the Taurus with good ergonomics)

[mawilson 2,133]

Why should any ex-FOB consult ABCD's in regard to car choices?

Cherry,

Am I to believe that some unknown Indian car made by a company that no-one has ever heard of

is better than a proven American-made vehicle made by a company with 100 years of history and

an annual R&D budget of US$6 billion?

[Saddle Bronc 124]

Cherry, am I to believe that some unknown Indian car made by a company that no-one has ever heard of is better than a proven American-made vehicle made by a company with 100 years of history and an annual R&D budget of US$6 billion?

Again, correcting you.

• M&M started by producing jeeps (and the design of the Scorpio is very externally--and even to an extent, framewise--similar to the Liberty).
  
• As the Escape Hybrid is a new vehicle, it can hardly be "proven"
  
• Ford has been hemorrhaging (sp) red-ink for more than 2 years now
  

If you're trying to say the Escort as proven, my answer is "yea, it's well-proven to be a lemon".

[almaty 19]

i have to agree with my brother sriniv..escorts sux

[mawilson 2,133]

i have to agree with my brother sriniv..escorts sux

Hey! mags will disagree

[Ban Hammer 14,463]

i have to agree with my brother sriniv..escorts sux

Hey! mags will disagree

her and her rear spoiler

[almaty 19]

i have to agree with my brother sriniv..escorts sux

Hey! mags will disagree

if she does like it..then she can ban me