A well established name, the over six decade old Mahindra group operates across a host of industries, including automotive, farm equipment, leisure and hospitality and information technology.
The two-wheeler sector is one area where the $15.9 billion group is a relatively new entrant, but confident of making a mark by leveraging the strength of its brand in rural markets and offering products built with customer needs in mind. Fuelling its confidence is the success of the Mahindra range of utility vehicles in recent years. Anoop Mathur, Member of the Group Executive Board, and President, Two Wheeler Sector, Mahindra and Mahindra Limited, wants to make it a “player of substance in the two-wheeler sector across segments and categories.”
The strategy is to create new segments and sub-segments, he said at the launch of Mahindra 110 cc Centuro and Pantero motorcycles in Chennai last week. In this interview to The Hindu later, he responded to a range of questions. Excerpts.
It was in 2008 the Mahindra Group entered the two-wheeler market, with the acquisition of Kinetic Motor Company. How has the journey been and how important is this business for the Group?
The two-wheeler business is an extremely important part of the Group as we look to expand our presence across the mobility spectrum. The journey so far has been very interesting and demanding as we have invested heavily in building capability for R&D and manufacturing. We already have almost five lakh scooter customers on Indian roads.
The two-wheeler market has seen a plethora of new offerings in the recent past. Is this the right strategy, something that your company intends to follow in the long-term as well?
Clearly the Indian customer is tired of the old and looking for more choice and variety. The uptake of new products shows that this is already happening. We will pursue this strategy of new product introduction as well. However, we will ensure that our machines are well thought out ones for consumers that offer real choice rather than a simple me-too option. We are and will continue to work hard to ensure the customer gets a wide variety of choices.
What can customers look forward to? Will it be scooters or motorcycles in the long-term as a driver of your revenue?
The customer can look forward to a range of differentiated product offerings from us. To us, scooters and motorcycles are just a product form. We have to deliver true value in the right form to the customer and so we will make efforts in both scooters and motorcycles.
Your company has announced a re-launch of Stallio and launch of 300cc Mojo. What is the status of the plans?
The Mojo will be launched soon as it is in its validation phase. It is the most ambitious project ever attempted in the Indian two-wheeler industry and we are confident of what we are developing.
Where do you see sales coming from — urban or rural markets. Will it be the strong presence of the Mahindra brand in rural areas or the success of your SUVs in urban markets that would help?
We have very strong brand and customer relationships in both segments of the market... urban due to SUVs and rural with our tractors and Mahindra Finance. We hope that customers from both markets will give us a warm welcome and are working hard to please them with our products and efforts.
With regard to manufacturing capacity, is Mahindra comfortable with the existing facilities?
We have adequate capacity for our current needs in Pithampur (near Indore).
Is there enough being done in the two-wheeler segment in terms of research and development and what is that Mahindra two-wheeler sector is planning?
As we look to expand our product range, we will have to invest in R&D. We have already invested in this area and we will continue to invest more. We believe that so far R&D has focused only on the product with scant regard to the customer.
We are focused on developing products that use technology to solve the real problems of the customer. We are already one of three manufacturers that is designing and manufacturing engines in-house in India. As we grow and expand, we will build capability to do much more. We also have the ability to dig into the capability and resources of the Mahindra Group in India and abroad, giving us depth and width of capabilities that is unique in the industry.
The current fiscal was tough. Do you see signs indicating that 2013-14 will be different?
We expect that going forward the volumes will improve as in this category consumers can postpone a buying decision but their ability to live without transportation is relatively limited.
Specially, as we see more youth and women enter the market backed by a good budget and better monsoon.
Considering that hire purchase is the preferred financing option of two-wheeler buyers what are your expectations from the Reserve Bank of India?
We hope that the RBI rationalises some of the exchange rates in the interest of the Indian consumer.
Whenever petrol prices increase, the two-wheeler users are the ones who feel the pinch most. Your comments.
We are working to continuously increase fuel efficiency. Our products are currently delivering best in class mileage.
A 10 per cent increase in fuel efficiency of our products offsets the increase in fuel costs. So in case you are driving an older, lower fuel efficiency product, you should look to upgrade to newer ones from Mahindra, it may turn out to be cheaper.