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International Marketing

Management

PROJECT WORK
(Under the guidance of Dr. R. M. Joshi)

Submitted by:
Nikhil Sabharwal
Roll no. 132
Section ‘C’

Project Title:
To study the cross country global operations for
Mahindra Automobiles (Bolero, Scorpio & Xylo)

Abstract:

The Mahindra Scorpio is an SUV manufactured by Mahindra &


Mahindra Limited, the flagship company of the Mahindra Group. It
was the first SUV from the company built for the global market.
The Scorpio has been successfully accepted in international
markets across the globe, and will shortly be launched in the US.

The Scorpio was conceptualized and designed by the in-house


integrated design and manufacturing (IDAM) team of M&M. The
car has been the recipient of three prestigious awards - the "Car
of the Year" award from Business Standard Motoring, the "Best
SUV of the Year" by BBC World Wheels and the "Best Car of the
Year" award, again, from BBC World Wheels.

The Mahindra Scorpio was launched in India in 2002. Soon after


the success of the Scorpio, Mahindra launched an upgraded
Scorpio with plush seats and rear centre arm rest, dual tone
exterior colour and various minor changes.

At the Auto Expo 2006, Delhi, Mahindra showcased their future


plans on the Scorpio model by showcasing a Hybrid Scorpio with
CRDe engine and a Scorpio based on a pick-up truck. The Hybrid,
the first such vehicle developed in India was developed by Arun
Jaura, a former Ford employee. His senior, Dr. Pawan Goenka, a
former GM engineer currently heads Mahindra's automotive
division and looks after the overall Scorpio project.

In November 2007, Mahindra launched a teaser campaign for


their new Scorpio Model, the m_Hawk on their official website.
On April 14, 2008, Mahindra revealed a concept of a diesel-
electric hybrid version of their Scorpio SUV at the 2008 SAE World
Congress.

21st Sep 2008 Mahindra launched their latest Scorpio with 6


speed automatic transmission gears.

About The Mahindra Group

The US $6.7 billion Mahindra Group is among the top 10 industrial


houses in India. Mahindra is the market leader in multi-utility
vehicles in India It made a milestone entry into the passenger
car segment with the Logan. Mahindra & Mahindra is the only
Indian company among the top tractor brands in the world.

The Group has a leading presence in key sectors of the Indian


economy, including the financial services, trade, retail and
logistics, automotive components, after-market, information
technology and infrastructure development. Mahindra has
recently made an entry in the two-wheeler segment which will
see the company emerge as a full-range player with a presence
in almost every segment of the automobile industry.
Mahindra's Farm Equipment Sector has recently won the Japan
Quality Medal, the only tractor company worldwide to be
bestowed this honour. It also holds the distinction of being the
only tractor company worldwide to win the Deming Prize. The US
based Reputation Institute recently ranked Mahindra among the
top 10 Indian companies in its Global 200: The World's Best
Corporate Reputations list.

Mahindra is also one of only four Indian companies to receive an


A+ rating from the Global Reporting Initiative (GRI) for its first
Sustainability Report.
Global Network

Mahindra & Mahindra International Operations


Network

Mahindra has been marching globally and has established presence


across all the continents barring Antarctica. Its partnerships in Eurasia,
Africa and South America and assembly plants in Brazil and Egypt, are
testimony to its determination to provide its global customers with
quality products and reliable service.

M&M has its global network expanding over Middle East, Africa,
America, Europe and Asia & Pacific. It reaches to its customers through
various marketing channels and among those channels the most active
one is the online mode of marketing channel. Customers can get all
the information customized to their specific needs on
www.mahindraautoworld.com/global/network.aspx This link acts as
one stop shop for various customers across the international
boundaries.

Various countries where M&M has its presence are-

Region Countries
Middle East Qatar, Oman, Yemen, UAE, Kuwait

Africa Sudan, Tanzania, South Africa,


Nigeria, Mozambique, Morocco,
Madagascar,
Kenya, Ghana, Ethiopia, Algeria,
Egypt.

Asia & Pacific India, Bangladesh, Malaysia,


Bhutan, Maldives, Nepal, Srilanka,
Khazakhstan, Brunei, Australia,
Tahiti

America Paraguay, Brazil, Chile, USA, Peru,


Honduras, Coasta Rica

Europe Italy, France, Portugal, Croatia,


Serbia, Makedonia, Bosnia,
Hungary, Bulgaria, Albania, Spain,
Greece, Turkey

Product standardization Vs Adaption


M&M Scorpio, Bolero, Pik-Up, Xylo are all designed keeping in view the conditions of
rough terrain and rough weather. All of these vehicles are labeled as off-road SUVs
which are suitable for all type rough weather terrain. Thus, M&M focuses more on
product standardization as its product is technologically advanced and is not consumer
sensitive product like FMCG products. But it focuses on adaption of marketing channels
and advertisements that it uses for its promotion in different countries.

EPRG Schema
M&M’s marketing approach can be put on as Polycentric on an EPRG scale. In
polycentric approach companies work in each country with the help of a subsidiary which
plans for its marketing strategy and product design. It can even form Joint Ventures with
the players in different countries and use their marketing channel to distribute its
products. Mahindra has publishes the advertisements in different languages in different
countries based on the language of the people. It has also sponsors the favorite games of
different countries. For example, it sponsored Canadian Nascar racing competition,
XYLO IPL cricket league, Chile Soccer team etc. It has participated in various road
shows in different countries and it has also participated in various auto exhibitions across
the globe eg. Johannesburg motor show.

Joint Ventures & Distribution Channels in different


countries
Mahindra & Mahindra entered into Joint Venture with TMI Pacific to
form Mahindra Automotive Australia. Mahindra & Mahindra Ltd.
(M&M), entered into a joint venture agreement with its existing
partner, TMI Pacific, a local Australian importer and distributor of
vehicles. The agreement lead to the formation of a new company
called Mahindra Automotive Australia which will do the marketing,
promotion and retail of Mahindra vehicles in Australia. Mahindra will be
the major shareholder with 80 per cent stake in the new Joint Venture,
while TMI Pacific will retain the rest.

Mahindra USA, opened a new assembly and distribution point in


Chattanooga on 31st December, 2009. Mahindra USA has moved its
North American headquarters from Tomball, Texas to co-locate with its
Houston, Texas assembly plant.
Mahindra USA worked together with one of its partners to identify a
suitable distribution channel solution that would meet both its
customer’s and dealer’s requirements for its products, while shifting
assembly from its Calhoun facility. This business model is a success in
the West Coast and will enable Mahindra USA to strengthen its
relationship with strategic partners.
Agni Incorporated Pvt. Ltd. a distributor in NEPAL has been associated
with the Mahindra brand for several years and has made a significant
contribution to its success in Nepal. “With its wide national network
and in-depth knowledge of the local market, Agni gives a definite
competitive edge in the passenger segment in the country,” said Mr.
Gerald Porcario, General Manager- Marketing, Mahindra Renault Pvt.
Ltd.

M/s Singye Agencies BHUTAN, the current Mahindra dealer in Bhutan,


is the local distributor for the XYLO. Customers will have a choice of
two XYLO models - a luxury 7-seater model, the E8, and the 8-seater
model, the E2.

Mahindra made its debut in Egypt with the launch of the diesel and
petrol versions of its Scorpio SUV in 2008, in partnership with the
Bavarian Auto Group. The Bavarian Auto Group, its partner in Egypt,
has extensive expertise in assembly and distribution of world class
automobiles and will help M&M further consolidate our presence in the
region.

The growing demand and the need for local presence to better address
the markets led to the establishment of Mahindra South Africa
operating out of Pretoria, and Mahindra Europe in Italy. The
Group has an assembly of small truck pickups in Uruguay for the Latin
American market known by the brand name of Cimarron. In
addition, distributors have been appointed in various other
international markets too.

Road Shows and Auto Expos

Road Shows and Auto Expos are the most prominent way by which
Mahindra showcases its auto products in different countries. It also
sponsors major sports and events in different countries. The articles,
Magazines and advertisements published in different countries are in
different languages depicting the taste and understanding of local
people.

Some of the Road Shows and Auto Expo sponsored or attended by


Mahindra to show its presence in different countries are:

• Mahindra sponsored Canadian NASCAR Racing Teamwins 2010


National Championship
• Johannesburg Motor Show
• Mahindra sponsored Nicaragua Baseball Match
• Soccer match sponsored by Mahindra Nicaragua
• Mahindra & Mahindra straddles the entire automotive spectrum
at the Auto Expo 2010

Joint Ventures and Acquisitions (Technology


partners)

Mahindra and BAE Systems signed Joint Venture agreement on


November 30, 2009: Mahindra & Mahindra Ltd. and BAE Systems have
signed an agreement to create a land systems focused, joint venture
defence company, based in India. Approved by the Foreign Investment
Promotion Board of the Government of India (GoI), the parent
companies' initial investment will be US$ 21.25 million over a three
year period. The company’s equity split will be 74% Mahindra and 26%
BAE Systems, in accordance with the current defence sector Foreign
Direct Investment regulations of the Govt. of India.

Mahindra & Mahindra Ltd. (M&M), India’s leading manufacturer of


utility vehicles, signed an MoU with Ssangyong Motor Company
(SYMC) to acquire a majority stake in the South Korean SUV maker.
SYMC is a significant player in the SUV segment in Korea, having
recorded 1.3 million SUV sales from 1990 to 2009. Mahindra, a US $7.1
billion Indian multinational, employs over 1,00,000 people across the
globe. Mahindra enjoys a leadership position in utility vehicles, tractors
and information technology, with a significant and growing presence in
financial services, tourism, infrastructure development, trade and
logistics.

Mahindra Navistar Automotives Ltd is a 51:49 Joint Venture


between Mahindra & Mahindra Ltd. (M&M) and Navistar Inc.
USA.
Mahindra Navistar will manufacture the entire spectrum of commercial
vehicles ranging from 3.5 – 49 tons GVW/GCW. These products are
developed to suit Indian conditions and will set new levels of reliability,
efficiency and customer experience unseen & unheard of in the
commercial vehicle industry. Huge investments are being made in
product development and in setting up of a Greenfield manufacturing
facility at Chakan near Pune.
M&M did Joint Venture with Renault SA, France's second-
largest carmaker to make Logan sedans in India. Mahindra,
India's biggest maker of sport-utility vehicles and tractors,
will own 51% of the company, with Renault holding the
remainder.

Mahindra acquired majority Stake in Reva and renamed it


as Mahindra REVA Electric Vehicle Company. Mahindra &
Mahindra Ltd. strengthened its position in the Electric
Vehicles domain with the acquisition of a majority stake in
REVA Electric Car Co Ltd. Bangalore. REVA Electric Car Co
Ltd. renamed as Mahindra REVA Electric Vehicle Co Ltd.
Under the new agreement signed by both the companies,
M&M will own 55.2% equity in Mahindra REVA by a
combination of equity purchase from the promoters and a
fresh equity infusion of over Rs 45 crores (approx US $10
million) into the company. The buyout makes the Mahindra
group a strong global player in the electric vehicle space.

Mahindra International
Mahindra & Mahindra Limited and International Truck and
Engine Corporation entered into a 51:49 joint venture in 2005
to create Mahindra International Limited. Mahindra International
Limited has three businesses:

• To manufacture trucks and buses in India for sale in India and export
markets
• To provide engineering services for the design and development of
truck and
bus products for International Truck and Engine Corporation globally
and the joint venture
• To enable International Truck and Engine Corporation to use India as a
significant supply base for sourcing components and materials

Mahindra International started producing a new range of commercial


trucks and buses in 2007 at one of the Group’s automotive plants. The
factory has the capacity to produce a wide range of commercial
vehicles, and includes cab assembly, vehicle assembly, and a paint
shop. The vehicles have 90% local content from the start due to the
easy availability of quality parts and materials from Indian suppliers. In
addition, Mahindra & Mahindra Limited has contributed its existing
light commercial vehicle business to Mahindra International Limited.
This will leverage the Automotive Sector’s extensive distribution
network to rapidly launch a full range of medium and heavy
commercial vehicles based, in part, on International Truck and Engine
Corporation’s existing product line and adapted for the Indian market.
Mahindra International is also expected to export vehicles through its
own distribution channel, as well as International Truck and Engine
Corporation’s and Mahindra & Mahindra’s overseas networks.

Mahindra & Mahindra Manufacturing plants

The three manufacturing units in Maharastra are in Mumbai, Nasik and


Igatpuri. The first two deal with multi-utility vehicles and the third one
deal with engines. The fourth plant is located in Zaheerabad in Andhra
Pradesh. This one deals with the manufacture of light commercial
vehicles and three wheelers.

Mahindra & Mahindra, a part of the Mahindra Group, has opened a new
auto manufacturing plant in the industrial hub of Chakan in
Maharashtra, with a phased investment of approximately INR500m.
The project is spread across 700 acres.

The company said that the plant will have an installed capacity of 0.3
million vehicles, and it will manufacture the company’s range of
products from 0.75 tonne Maxximo to 49 tonne Mahindra Navistar
truck. Mahindra’s new SUV and Pik-Up range and product line for the
US market will also be manufactured at this facility.

Mahindra Chakan has been designed as an integrated facility for


multiple different platforms from press to body to paint to general
assembly and the aggregates all coming up simultaneously, while it
will manufacture various MHCV, and it can also accommodate
production of other models if required by future market demand.

According to Mahindra & Mahindra, the new features of Mahindra


Chakan includes a press shop set up by Schuler of Germany, pint shop,
and an integrated colour changer that reduces wastage of paint and
thinner, thus reducing the amount of volatile organic compound.
First Choice
First Choice is a part of the Mahindra Group. The other promoters
include HDFC,
one of the most respected financial institutions in the country, and Sah
& Sanghi,
a Mumbai based company that's admired for its skills in retail
operations.
First choice is India’s largest multibrand used car company. The
Company’s mission is to create India’s largest automobile and
automobile related products distribution network by providing dealers
and customers with the largest choice of unique worldclass products
and services. First Choice achieves its objectives by providing
consumers with a wide choice of good quality used cars and by
bringing about trust and transparency in each of its dealings. First
Choice’s certified used cars are now being sold in 80 showrooms
spread across 45 cities in India. The Company will have more than 200
stores over a period of 2 to 3 years.

Homologation
The sport utility vehicle maker, which had been waiting for a splash in
the US market, is being forced to wait for the time being.

The reason being said is that the auto major is awaiting clearance from
the US homologation department in this regard. Homologation has
been defined as the certification of a product or specification to
indicate that it meets regulatory standards, including safety and
emission norms, crash test, road-worthiness of the vehicle. The
company’s move if it succeeds will make it the first Indian major to
launch passenger vehicles in the world’s largest automobile market of
the US. The company also aims to export sports utility vehicles,
including the Scorpio, to the North American market in the next few
years.

According to the company, its range of passenger vehicles including its


pick-up trucks are expected to hit the American markets this year. The
company already has a presence in the US through its medium-to-high
powered tractors. The company is believed to have built and readied
its products for the US market. The auto major in fact has lined up the
pick-up range of the Scorpio model and Mahindra XYLO, while the
homologation clearance takes its own official time.

In the meantime, the auto major is lining up what is termed as one of


the most forward looking moves towards making the company a global
behemoth. The pick-up trucks the company s lined up for are also
based on the Scorpio platform, which was developed more than six
years ago. The US market considers pick-up trucks as passenger
vehicles. Significantly, the US is also the world’s largest pick-up
market.

Automotive product profiles


BOLERO Range

Mahindra Bolero- a Sports Utility Vehicle (SUV) that has been


designed with balance of style, comfort and convenience suitable for
rough and tough road conditions especially in rural areas. Muscular
look, ergonomically designed seats, multi-directional AC, much larger
storage space and solid safety features makes Mahindra Bolero an
unmatched mid-sized SUV.

Bolero's 5-speed transmission ensures


optimum fuel efficiency. The interiors,
ergonomically designed antisubmarine
seats, power steering, powerful AC, and 4-
speaker Kenwood music system adds to the
driving pleasure. Mahindra Bolero is a
robustly built and sleekly designed car with
high ground clearance and easier to drive on
Indian roads. The vehicle is equipped with
2500 cc diesel Bolero that delivers
unmatched power. Its low center of gravity enhances the stability.

SEDAN Range

Mahindra-Renault, a joint venture between Mahindra &


Mahindra (India ) and Renault (France), have marked its entry into
the Passenger Car Market of India with the launch of Logan in the
Sedan car segment. Renault Logan debuts in India with a number of
features at very competitive price.
Mahindra Logan is available in petrol and
diesel both variants and is powered by latest Common Rail Engine
(CRD) based on Direct Fuel Injection. The Logan is a very wide body car
in its segment and a good performer as well that offers comfortable
seating for three persons in the rear seat with three separate
headrests. The interiors of the car are also very good looking. The
single-piece, square-shaped dashboard, nicely crafted steering wheel
with the chrome Renault logo, wide instrument panel and well
designed and finished gear lever are truly gracious and adds life to the
interiors.

SUV Range

Scorpio is the flagship product from Mahindra & Mahindra that has also been
successfully accepted in international markets. The car bridges the gap between style and
adventure, luxury and ruggedness, and performance and economy. It has strong engine
along with good looks and sophisticated interior design.

Mahindra Scorpio is fitted with SZ 2600 plus DI diesel engine that gives 109 bhp of
power with a great torque of 26 kgm. The 0-60 speed could be reached within 9 seconds.
The petrol version of the vehicle has 116 bhp engines from Renault that reaches 0-60 in
just under 8 seconds.

XYLO
SCORPIO
PIK-UP Range

MAXX Range

COMMANDER Range

Conclusions:

The Modes of International Market Entry:


Production in Home Country
Complementary exporting or piggybacking: M&M uses distribution
channels of an overseas firm to make the product available in the
overseas market.
International Strategic Alliance: M&M has done joint ventures and
collaboration with firms like BAE systems that cooperate with each
other to achieve common strategic goals but do not form a separate
company.

International Joint Ventures: Equity participation of two or more


firms resulting into formation of a new entity. Mahindra REVA,
Mahindra Navistar, Mahindra International are the joint ventures of
Mahindra and Mahindra to carry out international operations.

CKD units export: Mahindra started its exports in 1980’s when it exported
its CJ 5 model as CKD units to Iran where it was sold under the brand name of Sahara.

Government Regulations
Homologation standards: Any vehicle that has to be marketed or
sold in a country has to pass the homologation standards of that
country. Such certificates are issued by authorized agencies of that
country. ECWVTA (European Community Whole Vehicle Type
Approval) is the European agency aimed certifying the vehicles. It can
be applied to complete, incomplete or completed vehicles. Likewise
the US agency provides the homologation certificates for vehicles in
US. M&M is still waiting for homologation certificates for Scorpio and
Xylo in US, which would open up a huge market for Mahindra’s SUV in
US.

References:
http://www.mahindra.com/OurBusinesses/automotive_overseas_overvi
ew.htm

http://www.mahindraautoworld.com/about_international_operation.asp
x

http://www.indiaautomotive.net/2009/01/m-still-waiting-for-
homologation-and.html
http://www.dancewithshadows.com/autoindia/mahindras-us-dreams-
delayed/

http://www.surfindia.com/automobile/mahindra-mahindra-ltd.html