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COMPETITIVENESS

REPORT
Mahindra & Mahindra Ltd -
Automotive Sector

SUMMARY
Group Focus – Company………...….
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Competition.……………………….
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Forms Of Competition …….
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SWOT Analysis ..
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Competitive focus……..……....
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Leaders……………………….….
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Role of Prices, Costs, Innovation & entry
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International aspects
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Efficiency Elements
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SARANG B GAIKWAD
ITM Global Leadership Centre, PGDM-IB (2009-11),
Sources: http://www.mahindra.com, Roll No. 22
http://www.sap.com/solutions/business- 12/12/2009
suite/scm/pdf/mahindra_50058287S.pdf, sources within the
company,
GROUP FOCUS
The company considered for competitive focus is Mahindra & Mahindra Ltd. - Automotive
sector. The Mahindra Group’s Automotive sector is in the business of manufacturing and marketing of
utility vehicles and Light Commercial Vehicles. It was established in 1945. It is a US $6.3 billion
company. It is India’s fourth-largest automaker and 2nd largest independent Original equipment
manufacturer (OEM). It’s also leading tractor manufacturer in India. The company has vehicles in three
segments viz, Utility Vehicle, Light Commercial Vehicle & 3 wheeler segments. It has currently ventured
in the passenger car segment with Logan.

It is the market leader in Utility vehicle segment of more than 50 % of market share with the
products like Bolero, Scorpio, Xylo, etc. In light Commercial vehicle it is the market leader. It has CAGR
of 23 percent over the past four years.

Parameters Sales in Units Sales in Units % growth


( Nov’ 08) ( Nov’ 09)

Domestics auto 10430 21387 105.1


Sales

Total UV Sales 7523 15193 102

Year-to-date 147300 178447 21


sales

Sales (Domestic 11515 22587 96.1


+ Exports)

COMPETITION
The main competitors of M&M are:

TATA Honda General Motors

Toyota Force Bajaj

It has competition in its Utility Vehicle segment from Competitors like TATA with cars like
TATA Ace stating itself to be the cheapest LCV. The competition is on following parameters:

Utility Vehicle Segment:


 Prices
 Fuel efficiency
 Comfort with luxury,
 Styling and
 Features
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Light Commercial Vehicle:
 Prices
 Load Carrying Capacity
 Fuel Efficiency
 Less Maintenance
 Ruggedness and sturdy design.

3 Wheeler segment:
 Prices
 Fuel Efficiency
 Maintenance
 Prospective value on purchase
 Long term benefits.

Competition in the different segments is as follows:

I. In the Utility Vehicle segment the Scorpio is pegged after TATA Safari, Bolero against TATA
Sumo whereas, the new Xylo has competition with Toyota Innova & Chevrolet Tavera.
II. In 3 wheeler segment, Alfa passenger is competing with Bajaj GC 100 and Bolero Pick up with
TATA 207 DI and piaggio pickup van.
III. In the newly ventured passenger car segment Mahindra Renault Logan faces competition from
Ford Fiesta, Maruti Suzuki Dzire, etc.

SWOT ANALYSIS OF MAHINDRA & MAHINDRA:

Strengths:
 Brand name
 Ruggedness, good quality
 Innovative Products
 Customer centric focus
 Products at extraordinarily affordable cost
 Unique features like Mileage Calculator, talking car, micro-hybrid technology.

Weaknesses:
 Lacks in comfort in comparison to other cars like Toyota Innova.
 Reliability
 Service cost is high i.e., Spare costs incurred are high
 Less Fuel efficient as compared to Light passenger vehicles and entry-level sedan.

Opportunities:
 Current portfolio with luxury segment
 In passenger car segment.

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 Changes in current platform
 Two-wheeler segment

Threats:
 Constraints of extra tax levied by government on engine with capacity more than 1.3 lit and
Overall length
 Expansion of Small car segments in urban & rural markets
 Prices of commodities like Steel, rubber, plastics and polymer.

LEADERS

Dr. Pawan Goenka is the president of Mahindra group’s automotive sector. Formerly, he was in
General motors, USA in R&D. He’s also been appointed as the chairman of the newly formed Joint
venture Mahindra Renault company. He has hired young engineers and recruited people for vehicle
styling department. Has played a major role in strengthening R & D Dept. He initiated conscious efforts
to change the image of the company which was considered as rural based to urban.

He facilitated Mahindra to venture into urban market and introduce the SUV segment in India. It
was during his tenure the Bolero was launched, which is the one of the highest selling car of M&M.
Scorpio was conceptualized and design by the in-house integrated and manufacturing team led by Mr.
Goenka. He has inculcated demanding work culture and discipline by promoting professionalism in
workplace.

He’s the head of Society of Indian Automobile Manufacturers (SIAM) and has been conferred
with SAE Fellowship by the Society of Automotive Engineers (SAE), USA. Has supported various
activities of SAE in western India. He focused on developing auto passion among all employees. He has
been elected as the President of Farm Equipment Sector as well for next year.

Role of

PRICES:

It has been the case that the high end variant of Mahindra Xylo at approx Rs. 7.30 lakhs is
competing with the starting variant of Toyota Innova at price of approx Rs. 8.00 lakhs which has resulted
to customer satisfaction in terms of price, value for money, with fully loaded vehicle.

The newly launched SCV (Small Commercial Vehicle) Gio promises to be the cheapest mini
truck with a price range of 1.75 lakhs and impressive mileage rivaling TATA Ace and Piaggio Ape.
Currently, Piaggio ape is the market leader growing at 40% annually and 48% market share. Mahindra has
always spearheaded in providing lowest prices to the consumers bundled with various features.

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COSTS:

It is one of the major driving factors of Manufacturing. Currently, M&M has 600 suppliers of
which Scorpio accounts for 200 and Xylo for 110. To reduce the disparity and to increase efficiency and
co-ordination among suppliers vendor rationalization is implemented which helps in achieving quality by
eliminating weak supplier and thereby achieving cost efficiency.

Employee costs are generally less as compared to the rivals. Integrated material reduction cost
(IMRC) team works for material standardization and minimum wastage of resources.

INNOVATION & ENTRY:

Innovation plays a vital role in M&M considering that 50% of the revenue has to be obtained by
new products and currently it accounts for 53%. I4 team is a team which focuses on product
improvement, quality improvement and process improvement. Experts from various fields like R&D,
Manufacturing unites to form cross functional teams to help facilitate the process of innovation and to
reduce the loop holes.

Scorpio has three refresh models with 43 new changes including Tech packed changes in engine,
etc. Every vehicle’s product life cycle is decided and a refresh model is formulated accordingly.

INTERNATIONAL ASPECTS:

 Mahindra is going to venture into US market which comprises of 0.1 million suv vehicles
annually which is much greater than India’s total 1.5 million cars annually.
 Expansion in terms of volume.
 Hybrid vehicle is still in on the research stage.
 Mahindra is the 3rd largest tractor manufacturer in the world and hence there are opportunities in
the Tractor segment in the world.

EFFICIENCY ELEMENTS:
 Frugal engineering mindset
 Cost saving culture even during the time of recession
 Exposure is very good.
 Productivity upgradation includes Process improvement
 Project management techniques like Poka Yoke, a mistake proofing technique.

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