International Marketing Management

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

Submitted by: Nikhil Sabharwal

Roll no. 132Section ‘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 CountriesMiddle 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 AdaptionM&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 SchemaM&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 asignificant 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_overview.htm

http://www.mahindraautoworld.com/about_international_operation.aspx

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