A CASE STUDY ON ANAND MAHINDRA – A BIG CONTRIBUTION TO

THE INDIAN CARS COMPANY (SUV)

A SLOW JOURNEY

The proposition that prompted Mahindra to think about a people’s car was a social concern .Born in
1955, Anand Mahindra was born to late industrialist Harish Mahindra and Indra Mahindra. He
completed his early schooling from Lawrence School, Lovedale. Following this, he went on to
study film making and architecture from Harvard University. In 1981, Anand returned to India after
completing his MBA from Harvard and began his entrepreneurial journey.Mahindra Group’s
flagship company Mahindra and Mahindra reached new heights when the third-generation scion,
Anand Mahindra was appointed as the managing director of the automotive company in 1997. The
year 2002 was a turning point for the company when it launched its sports utility vehicle Scorpio.
Following this, he took up the responsibilities of Chairman in 2012. He played a vital role in
boosting the popularity of the brand and driving its growth. In 1994, the group underwent its first
major restructuring exercise following which its diverse business was divided into six distinctive
sectors. In 2011, M&M began using “Rise” as its new brand position.The company’s turning point
came in 2012 when Scorpio was launched . The in-house designed and developed vehicle spiked the
brand popularity and took it to international markets for the first time. Anand Mahindra is one the
most talked about billionaires in India. Now he is known for his brave decisions in the corporate
world. Whether it be launching India's most loved SUV (Scorpio) or India’s best Off-Roader –
Mahindra Thar and various other decisions made in other sectors. He is also among very few
billionaires in India, who just don’t want to be indulged in their luxurious lifestyle but also he wants
to contribute to the society and for doing the same more effectively, he actively takes part in many
social activities as well.
 “You go battle with your strengths.”

Aakanksha S., CEO

WHAT STANDS OUT?

The word “SUV” stands for a sports utility vehicle that is used to denote any vehicle that looks like
a station wagon. The changes are to be purely cosmetic in nature and the engine shall be retained
with the existing line of 2.2 litre M-Hawk turbo diesel engine. It is anticipated that the power and
torque figures could be increased from the existing 120 bhp with 290 Nm of torque to 140 bhp and
330 Nm of torque. The SUV may get a six speed automatic transmission this time apart from five
speed manual gearbox. The suspension may be worked upon to deliver a smoother ride quality at
the rear and improved handling. The interiors may receive new upholstery in fabric and come with
leather options to make it look a bit more up-market and stylish. Interesting features like start-stop
system, steering mounted controls, Bluetooth with USB and aux-in connectivity have been included
as a standard feature. On the exterior, the Scorpio SUV may receive projector headlamps, daytime
running lights and LED tail lamps. The front section may probably be designed to find some
resemblance with the XUV 500.

A FEW HURDLES

Too many crises

Pawan Goenka had not expected M&M’s R&D infrastructure to match that of General Motors
which, in the early 1990s, had an annual budget of $1 billion as well as a team of 20,000 engineers
spread across multiple locations. But neither was Goenka prepared for the ground reality in Nashik.
Consider that the research facility was merely a shed and had only 50 engineers.

Almost six and half years since the bumper XUV 500, a runaway success seems to have eluded
Mahindra. It lost its position as India’s largest utility vehicle (UV) manufacturer to Maruti Suzuki, a
rival that has traditionally been strong in passenger cars. The nimbler Ford, Renault and even Jeep
have capitalised on the compact segment against the once poster boy for homegrown SUVs with
Ecosport, Duster, S-Cross and Compass.

Price does matter

No matter what budget you have, Mahindra has an SUV for you. However, one of its products has
always had a huge fan following in India. So much so, that ever since it was first introduced back in
2002, over 6 lakh units have been sold till date. Yup, that’s the Mahindra Scorpio we’re talking
about. It is and has been Mahindra’s best selling passenger vehicle for more than a decade

STRATEGIC LEAP

The year is 1997. Gateway House, the headquarters of Mahindra & Mahindra (M&M), located
close to the Gateway of India and the Taj Mahal hotel, is the venue for a board meeting headed by
Keshub Mahindra, chairman of M&M. Few in the boardroom know that the project being
considered will change the perception of the tractor-maker forever and become the career defining
moment of then vice-chairman and director, Anand Mahindra, and his acolytes.

“Let’s Go”, the two words spelt out during the board meeting literally lay down the future path for
the maker of utility vehicles and tractors. This is the motto for the company’s most audacious
project: to build India’s first indigenously developed affordable sports utility vehicle (SUV), a task
never tried before. It’s called Project Scorpio.

The SUV became a roaring success. But it meant more to the company than a great new vehicle. It
brought the confidence to make more audacious moves, to forge strategic acquisitions and to build
new products and businesses from scratch.

Fifteen years hence, Scorpio has become an iconic product in India which, even today, is in short
supply. On an average, 109 Scorpios are sold daily. Over 4 lakh units have been sold globally since
the launch. It is an SUV which not only defined M&M’s future, but also opened up a new market of
affordable SUVs.

Pawan Goenka, president of automotive and farm equipment sector at M&M and one of the key
architects behind the project, recalls how the company was at a crossroad at the time: “We had three
options, to sell products licenced from MNCs, develop a big 10-seater car or build a new product
from scratch. The last choice was the toughest, but we chose that option.” M&M was betting its
future on the Scorpio. The product had to be different. So the company adopted a unique approach.
M&M conducted India’s first-ever intensive research on SUVs and put together a team of 120
engineers with an average age of 27 under the leadership of Alan Durante (then executive director
of automotives), Goenka and Anand Mahindra.

For the first time, there was 100% participation from suppliers in the development process. The
mandate was clear — to build a vehicle that combines the luxury of a car/sedan with the thrill of an
SUV. The Scorpio had to be big and powerful with mean looks, equipped with latest technology
and modern design and more space than a car/sedan — all the goodies but at an affordable price.

“Project Scorpio was not a top-down strategy or a one-man vision; it was a bottom-up programme,”
says Anand Mahindra, vice-chairman and managing director, M&M.

After five years of rigorous research, the Scorpio was launched on June 20, 2002. M&M surprised
the market by pricing it between Rs 5 and Rs 7 lakh. The idea was to offer the shout value of Pajero
at an affordable price. That’s what happened. Scorpio became a premium brand with mass appeal.
Within a week, bookings hit the 1,000 mark, another first for the segment.

Scorpio most popular SUV by a big margin: Mahindra’s Scorpio has for long been amongst the
most popular SUVs in this segment and despite a falling Month-on-Month and Year-on-Year figure,
it has continued to clock more than double the sales of its nearest competitor in Feb 2019. It
remains to be seen if the new launches will affect the Scorpio’s popularity or not.

Second most popular SUV is also a Mahindra: At the second spot is also a Mahindra - the XUV500
- which received a facelift last year, but it was the highest loser in the month-on-month figures.
However, its February sales figures are still more than its average sales in the last six months

February 2019 was the first full month of the Tata Harrier being on sale. The SUV managed to
leave past the Jeep Compass and closed the sales gap with the XUV500 to under 400 units. With the
current-gen XUV500 nearing the end of its life cycle, we might see Harrier taking over the second
spot soon. Tata will also introduce the automatic drivetrain option, a petrol engine and a 7-seater
version of the Harrier in future.
Tata’s Hexa has had an average sales figure of nearly 500 units for the last six months, but things
haven’t been as smooth for it in the first two months of 2019. Given that the Harrier, and the
upcoming MG Hector, will get 7-seat versions in future, competition for the Hexa will only increase
in the future. The least popular SUV in this segment is the Tucson and it currently makes for a little
more than 1 per cent of the entire sales of the midsize SUV segment.

STRONGER AND BETTER

The launch of Scorpio, an SUV, was a major boost to the group in 2002 but the stock prices
dwindled in the market. With his sheer belief Anand played his cards well in the dicey gamble and
emerged as a winner. Scorpio made positive impressions on the company's growth and came out as
a well judged risk. He also launched its highly appreciated UV Bolero. M&M’s Automotive Sector
makes a wide range of vehicles including MUVs, LCVs and three wheelers. M&M is the largest
manufacturer of MUVs, offering over 20 models. The company is presently a market leader in the
UV segment and its share is a darling of long-term investors.

The company has recently shifted its focus on developing components and offering engineering
services. It has also made strategic acquisitions of plants in China and the United Kingdom and has
three assembly plants in the USA. It has partnerships with international companies like Renault SA,
France, Nissan and International Truck and Engine Corporation, USA .
Awards Awarding Organization Year
India’s Most trusted - Instituted by the Brand Trust Report India Study . 2014
SUV/MUV
Gold for Nightmare Mag Ad Public Relations Council of India Awards(PRCI) 2013
Bronze for New TVC Public Relations Council of India Awards(PRCI) 2013
Hall of Fame Award CNBC TV18 Overdrive Awards 2013
Golden Peacock Global Award Corporate Governance 2019
for Excellence

“You go battle with your strengths.”

Aakanksha S.

REFERENCE LINKS

● https://www.outlookindia.com/website/story/automobiles-cars-in-demand-mahindra-
scorpio-xuv500-tata-harrier-among-segment-leaders-in-february-2019-sales/327812
● https://economictimes.indiatimes.com/sunday-et-what-makes-the-mahindra-mahindras-cult-
brand-scropio-click/articleshow/14187619.cms
● https://auto.mahindra.com/about-us

● https://economictimes.indiatimes.com/industry/auto/cars-uvs/will-mahindra-mahindra-rise-
again-to-occupy-its-lost-space-in-the-passenger-vehicles-
market/articleshow/63724114.cms?from=mdr