AUTOMOTIVE INDUSTRY

INDUSTRY ENVIRONMENT ANALYSIS (Porter’s 5 forces)

Threat of new entrants:
- More time and high cost of
entry Low
-Knowledge and technology
-Government policy
-Access to distribution channels
Moderate Moderate
High
Intensity of Rivalry : High
Bargaining Power of Bargaining Power of Buyers :
-Number and diversity of - More options
Suppliers :
competitor - Buyers are large in number
- Switching cost is high
- High price competition - Price sensitive
- Unique products
- High exit barriers - Brand loyalty
- Few suppliers
- Product quality and
- Quality of goods is critical
features

Moderate
Threats of Substitute:
- Use of Public transport
- Differentiated industry
Products
 RESOURCES
Tangible
• Financials
– Total assets Rs 35,675
Cr
– Cash Rs 2633 Cr
– Investments Rs 4825 Cr
– Low debt/equity ratio
• Physical
– Mahindra research &
valley, Chennai (Pro dev,
testing, validation)
– Plants at Nasik, Chakan,
at 8 different locations
– Mahindra ‘Samriddhi’
(soil & water testing
labs)
Intangible Human
• Technology • Human
– C2 CRDe engine – Top Management
– In-house gasoline – Centre for Creative
engine Leadership, USA
– Applied for 24 patents
& 8 Design
registrations
– Micro hybrid
technology (Pick-ups)
• Brand & Reputation
– Swaraj, Arjun tractors
– Worlds no.1 tractor
manufacturer
– ‘Mahindra Tractors’
iconic brand, enjoys
strong following
CAPABILITIES(FUNCTIONAL)

Distribution • Effective rural dealership channels

• Creating synergy between Tech Mahindra

HR and Satyam employees

• Yuvraj-215 Tractor received ‘Golden

Peacock Award,2010’ for innovative
R&D product and Scorpio won Autobid
technology award for its Micro Hybrid
technology

• Successfully diversifying into IT,

Management Hospitality, Financial services sectors
 VIRU ANALYSIS
Capability Valuable Costly to Rare Unmatchable Competitive Performance
imitate Consequences Implication

Largest Producer Yes Yes Yes No Sustainable Above Avg.

of Tractors in Competitive Return
world
SUVs: Bolero Yes No No Yes Competitive Average to above
Sales Parity avg. Return
Scorpio: Own R Yes Yes No No Competitive Average to above
& D; Parity avg. Return

Mahindra No No No No Below Average

Satyam Return
Mahindra Yes No Yes No Avg. Return
Finance

Brand Value Yes No No No Competitive Average Return

Parity
 INTEGRATION
2002: SUV 2010: SUV(SsangYong
Motor Company)
1999:Launch of Bijlee, a battery-operated,
environmental-friendly 3-wheeler
2007:Mahindra Navistar
Automotives Ltd. 1965: LCV

1963: Tractors
2009: Electric car
1949 :Assembly of Willys Jeep segment(REVA)

1958:Machine tool Div

1995: Mahindra
1986: Tech Mahindra
Holding & Finance
Limited 1975 :Engine Mafg plant(Igatpuri)

Forward Intgr 1962:Mahindra Ugine Steel Company

Backward Intgr
Horizontal Intgr
Diversification 2005:Manufacture of gears and transmission shafts
VALUE CHAIN ANALYSIS(Xylo)
Simplified Planning
Practices to Reduce
Planning Costs
Activities
Support

Effective Training Programs

to Improve Worker
Efficiency and Effectiveness

Easy-to-Use Manufacturing Investments in Technology in order

Technologies to Reduce Costs Associated with
Manufacturing Processes
Systems and Procedures to find the Frequent Evaluation Processes to
Lowest Cost Products to Purchase Monitor Suppliers’ Performances
Raw Materials
Highly Efficient Efficient Plant Delivery Schedule Small, Highly Effective Product
Systems to Link Scale to Minimize that Reduces Trained Sales Installations to
Suppliers’ Manufacturing Costs Force Reduce Frequency
Products with the Costs and Severity
Firm’s Production Products Priced to of Recalls
Processes Generate Sales
Selection of Low Volume
Organizational
Located in Close Cost Transport
Learning National Scale
Proximity with Carriers
Suppliers Advertising

10% 5% 5% 0% Cost Reduction Of

21%
Primary Activities
VALUE CHAIN ANALYSIS
MERGER & ACQUISITION
c
• In Dec1999 Mahindra-Gujraat Tractor(60%)
• In Jan 2007 Mahindra- Schoneweiss, Germany(90%)
• In March 2008 Mahindra- G.R.Grafica Ricerca Design (GRD)
• In July 2008 Mahindra-Punjab tractor
• In July 2008 Mahindra-Kinetic (80%)
• In April 2009 Tech Mahindra – Satyam
• In Apr 2010 Mahindra-Logan
• In May 2010 c
• In May 2010 Mahindra- GippsAero,Australia
• In Aug 2010 Mahindra- Ssangyong Motor Company
Joint Venture:
• In Nov 2005 Mahindra-Navistar Truck, USA (51:49)
• In March 2010 Mahindra + Yueda Group = MYYTCL
ACQUISITION `
Year Acquisition Stake %

Dec1999 Mahindra-Gujraat Tractor 60

Jan 2007 Mahindra- Schoneweiss, Germany 90
March 2008 Mahindra- G.R.Grafica Ricerca Design (GRD) -

July 2008 Mahindra-Punjab tractor 63

July 2008 Mahindra-Kinetic cc 80
April 2009 Tech Mahindra – Satyam 100
Apr 2010 Mahindra-Logan -
May 2010 Mahindra- Reva 55
May 2010 Mahindra- GippsAero,Australia -
Aug 2010 Mahindra- Ssangyong Motor Company Proposed

Joint Venture:
Nov 2005 Mahindra-Navistar Truck, USA 51:49
March 2010 Mahindra + Yueda Group 51:49
DIVERSIFICATION

ENGINEERING
AUTOMOBILES

AGRI

IT

INFRASTRUCTURE HOSPITALITY
RETAIL FINANCE
RELATED & UNRELATED DIVERSIFICATION

TRADING INFRASTRUCTURE AUTOMOTIVE

LOGISTIC
FORAY (3%) (60%)

Retail
Lifespace Two Wheeler
ENGINEERING

Odyssea
Electric Car
World City
Aircraft
Trucks

Powerol Farm
Equipments

Defense
Finance
IT (24%) Vehicles
(12%)
BCG DATA

Current Competitor
Industry
Product Market Key Competitor s' Market X
Growth(%)
Share(%) Share(%)

Two wheeler 0.8 Hero Honda 59 0.013 26

Three wheeler 10.1 Bajaj 63.6 0.15 25.9

Logon (mid
1.9 Honda 17 0.12 14.2
size)
Tractor 41.4 TAFE 22 1.8 28.3

Bolero(UV) 26 Force Trax 13 2 20

Scorpio (SUV) 22.5 Ford Endeavour 19.4 1.15 29.3

Xylo (MPV) 6.8 Innova 31 0.22 40.9

 BCG MATRIX
50
High

Xylo (0.22 X)
Industry Growth(%)

Scorpio (1.15
X)
Tractor
(1.8 X)
27.8 Three Two wheelers
wheelers (0.013 X)
Bolero (2 X)
(0.15 X) Logon
(0.12 X)
Low

100 X High Low 0.01 X

Relative Market Share
GE MATRIX
 Agri Equipments Automobile Mahindra Finance
Real Estate
MARKET ATTRACTIVENESS

Mom and Me

Two wheelers

Tech Mahindra
Defense
Mahindra First Choice

COMPETITIVE STRENGTH
 Agri Equipments Automobile Mahindra Finance
Real Estate
MARKET ATTRACTIVENESS

Mom and Me

Two wheelers

Tech Mahindra
Defense
Mahindra First Choice

COMPETITIVE STRENGTH
INTERNATIONAL STRATEGIES

Internationalization: It is a process of increasing

involvement of an enterprise in international
markets.

Strategies :
Exporting Licensing
Franchising Joint Ventures
Acquisitions Green-Field Development
Production Sharing Turnkey Operations
BOT Concept Management Contracts
INTERNATIONAL STRATEGIES

Exporting :

• The company exports its products to several regions

including Europe, Africa, South America, South Asia
and the Middle East.
• Exports tractors to Turkey
• Scorpio, as Mahindra Goa in Italy
• Mahindra Pik Up & Bolero Pik Up (Cimarron) in Africa
• Xylo Cargo Van in S. Africa
• Mahindra Agribusiness (MSSL) exports grapes,
pomegranates and apples to Europe & UK
INTERNATIONAL STRATEGIES

Joint Ventures :

• In Nov 2005, Mahindra signed a JV with Navistar

International Corporation known as Mahindra
International Engines Ltd. (51:49).
• Mahindra Yeuda Tractors Co. (80:20) has setup R&D
and Engine facility in China in Mar 2010.
• Mahindra is now in talks with Proton, an auto giant
from Malaysia for a joint venture.
INTERNATIONAL STRATEGIES

Acquisitions :

• In Jan 2007, Mahindra acquired Schoneweiss & Co.,

Germany through its subsidiary Mahindra Forgings.
• In May 2010, Mahindra acquired Gippsland
Aeronautics one of the Australia’s most reputed
aircraft producer and Aerostaff Australia, a aircraft
component maker.
• In Aug 2010, it is planning to acquire Ssangyong
Motor Company of South Korea.
INTERNATIONAL STRATEGIES

Franchising :

• Mahindra Ocean Blue Marine Pvt. Ltd. which

manufactures powerboats for Indian marine and
defence sector is finding international franchisees for
enthusiastic customers of recreational boating.
MAHINDRA GROUP

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