CONSUMERS, FIRMS & MARKETS – PROJECT REPORT

INDUSTRY – AUTOMOBILE
COMPANY & PRODUCT – MAHINDRA & MAHINDRA -
“SCORPIO”

SEMESTER – 1st
ACADEMIC YEAR – 2019-20

SUBMITTED BY - SUBMITTED TO -

(1) Ashwin Kakkar - 201931012 Prof. Dr. Gajavelli V S

(2) Ritik Soni - 201931035
(3) Siddhesh Asatkar - 201931045
(4) Trisha Patre - 201931049

GROUP NO. - 9
SECTION – E
 ACKNOWLEDGEMENT

It gives us immense pleasure to express our sincere gratitude to all the helping hands that have
guided us in the completion of this project successfully. It was a great learning experience for each
one of us. As students of IMT - Nagpur ,we were blessed with an opportunity to learn and explore
our domains in the field of economics with best guidance from our respected professor of the
course, Dr. Gajavelli V S (Faculty in-charge of Consumer, firms and markets). Because of the
flipped classroom approach, case study methodologies and relating our concepts of economics to
real life economical issues, we were able to put in our best efforts to prepare this report.

The project on analysing “MAHINDRA & MAHINDRA- SCORPIO” based on various economic
forces would not have been completed with support of each group member, our peers and the most
crucial person, Prof. Dr. Gajavelli V S ,whose constant support and encouragement have been our
guiding light for the success of this report.
 INDEX

S.No. CONTENT PAGE NO.

1. About the company 1
• Objective 1
• Vision & Mission 1
• Background & industry 1
profile
2. Demand & Supply 2
3. About the product 3-4
• Product life cycle 3
• Supply & demand 3
tracking
• Market potential & 4
analysis
4. Production & costs 4
5. Current status of development 5
6. Government regulations 6
7. Government initiatives 6
8. Expected goals 7
9. Product future scope 7
10. Sales & demand forecasting 8
11. SWOT analysis 9
12. Market capex 10
13. Learning objectives 10
14. Sources of data 11
 ABOUT THE COMPANY

COMPANY:
MAHINDRA & MAHINDRA LTD.
OBJECTIVE:
The project aims at analysing a highly cost effective Mahindra product which would cater to needs
of people and to track the drivers of supply and demand for the product and hence prices and
valuation. Analyse supply of Mahindra product in automobile market and corresponding demand to
find the share of Mahindra product in a market ricing of Mahindra product in automobile market to
develop competitive strategy for creating demand for the product. Analysing production cost of
product for making and creating competitive prices in market. Finding the market structure of
Mahindra product to analyse the competitors of the product and its response from the customers.
Finding the loop holes of product where company can find the ways to improve its profitability by
not depending on industry structure and its dynamics.
VISION AND MISSION :
The company’s vision and mission is to earn the customer’s loyalty by delivering sales and service
experiences with high quality, excellent value, integrity and enthusiasm. The objective is to function
as a team, work ethically, and focus on meeting and striving to exceed the expectations of the
customers.
BACKGROUND AND INDUSTRY PROFILE:
Mahindra & Mahindra Limited is an Indian multinational car manufacturing corporation
headquartered in Mumbai, Maharashtra, India. It was established in 1945 as Mohammad &
Mahindra and later renamed as Mahindra & Mahindra. It is one of the largest vehicle manufacturers
by production in India and the largest manufacturer of tractors in the world. It is a part of the
Mahindra Group, an Indian conglomerate.
Mahindra and Mahindra Limited is engaged in the manufacture of passenger cars, commercial
vehicles and tractors. The Company's segments include Automotive, which is engaged in the sale of
automobiles, spare parts and related services; Farm Equipment, which is engaged in the sale
tractors, spare parts and related services; IT Services, which includes business consulting and
related support activities; Financial Services, which includes services relating to financing, leasing
and hire purchase of automobiles and tractors; Steel Trading and Processing, which is engaged in
trading and processing of steel; Infrastructure, including operation of commercial complexes,
project management and development; Hospitality, including sale of Timeshare; Systech.
It consists of automotive components and other related products and services; Two wheelers, which
consists of sale of two wheelers, spare parts and related services, and Others, which includes
logistics, after-market and investments.

1
 DEMAND & SUPPLY

Supply & Demand status of Mahindra vehicles in the current market:

• There is an increase demand for electric vehicles in the automobile sector & Mahindra is
utilizing this opportunity as it is in talks with global players to supply its electric
powertrains and other parts, plus it will also launch its electric consumer vehicles in the
Indian market. Hence, greater demand and supply is seen in electric automobile sector of
Mahindra.
• There is a decline of Auto sales due to low wage growth and slowing economy. Hence,
demand among consumers going down due to stress in finance market as a result of which
Mahindra & Mahindra reported a 3 per cent drop in auto sales.
• India faced an unexpected slowdown in consumer demand, and this has led to a build-up in
inventory. It is believed that an inventory correction is underway and can exaggerate the
extent of final demand.
 ABOUT THE PRODUCT

• PRODUCT LIFE CYCLE :

• TRACKING SUPPLY & DEMAND :

Mahindra’s Scorpio has for long been amongst the most popular SUVs in the 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. Mahindra Scorpio is the most popular SUVs in the
segment and comprise of 66 per cent of total sales in the segment in February 2019.
 • MARKET POTENTIAL ANALYSIS :

• The Scorpio continues to hold onto the second spot.

• The sales have gone down by 27 percent in the month over month (MoM) comparison.
• Only 4000 units of the Scorpio were shipped in April against 5000 units in March
2019, leading to a decline of 27.66 percent.
• Scorpio’s market share has gone down by 3.46 points compared to March and
currently stands at 22.13 percent.

PRODUCTION COST

The company has announced a marginal hike in the prices of all its passenger vehicles by up to ₹
36,000 across majority of it's passenger models by July 2019. This price increase is due to the
implementation of AIS 145 Safety Norms across all passenger vehicles in India .

4
 CURRENT STATUS OF DEVELOPMENT

The 5 major fronts on which Mahindra Scorpio is working currently are:

1) DESIGN

• Lower roofline.

• Front end to have the signature 7 slat grille.

• Headlamps to be wrap around units.
• Bonnet to have bold wheel arches.
• Raked rear windscreen.

2) ENGINE

Features a BS VI compliant 2.0 litre diesel engine.

• Turbo diesel motor to be available in 3 power tunes.
• 2 transmission options to be available i.e, 6 speed manual and 6 speed automatic.

3) PLATFORM

• Higher crash safety.

• Improved vehicle dynamics.

4) CO-DEVELOPMENT

• 2nd vehicle to be co-developed by Mahindra North American Technical Centre (MNTAC)

and Mahindra Research Valley (MRV) after Mahindra Marazzo.

5) PRICE

• The new 2.0 litre BS VI compliant engine powering model likely to go up in price
as compared to the earlier model which was priced around 16.37 lakhs.
 GOVERNMENT REGULATIONS

The automobile industry in India is governed by the following regulations :

• Ministry of Shipping, Road Transport & Highways (MoSRT&H) which is the nodal
ministry for regulation of the automotive sector in India.
• Ministries such as Ministry of Environment & Forests and Ministry of Petroleum & Natural
Gas also have an important role in the formulation of automotive regulations and standards
in India.
The principal act governing the automobile sector in India is:
• The Motor Vehicles Act, 1988 (MVA) and the Central Motor Vehicles Rules 1989 (CMVR).
MVA governs emission norms and safety standards in India and illustrates the law
pertaining to motor vehicles. The CMVR provide the rules that explain the MVA in detail.
• The principal instrument governing the automobile sector in India is the Motor Vehicles
Act, 1988 (MVA) along with the Central Motor Vehicles Rules 1989 (CMVR). The Act
governs emission norms and safety standards in India and consolidates the law pertaining to
motor vehicles.
• Under Rule 126 of the CMVR, various test agencies are established to test and certify the
vehicles based on the safety standards and emission norms prescribed by the Ministry.

GOVERNMENT INITIATIVES

The Government of India encourages foreign investment in the automobile sector and allows 100
per cent FDI under the automatic route. Some of the recent initiatives taken by the Government of
India are -
• The government is aiming to develop India as a global manufacturing centre and an R&D
hub.
• The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the
country for introduction of electric vehicles (EVs) in their public transport systems under the
FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India)
scheme. The government will also set up incubation centre for start-ups working in electric
vehicles space.
• In February 2019, the Government of India approved the FAME – II scheme which requires
funds around Rs 10,000 crore (US $ 1.39 billion) for FY20 - 22.
• The Government of India is planning to set up R&D centres at a total cost of US$ 388.5
million to enable the industry to be on par with global standards.
 EXPECTED GOALS:

• The fourth-generation Scorpio to be launched in 2019 will be built on an enhanced

architecture of the current version, with a design and features to compete in developed
markets. Mahindra’s plan is to build an SUV and a pickup truck.
• Mahindra has long been talking about entering the US market with a Scorpio-based small
pickup truck. The product under development is not only critical to international
operations chief Arvind Mathew’s aim to drive into the developed markets of North
America and Europe, but also to hold on its own in the increasingly competitive domestic
SUV market.
• The Z101 will be the second major platform to be conceptualised at the North American
Technical Center in Michigan, US. The first was U321, a project to build a premium utility
vehicles that is expected to hit the road in the next 12 months and take on the Toyota Innova
Crysta.
• Mahindra is likely to closely integrate its various design houses, such as the one in
Michigan, Pininfarina and MGRD in Italy, Ssangyong in South Korea and its in-house
design studio IDAM. Mahindra is banking on the new models — S101, the micro SUV for
small-car buyers and U301 the compact SUV aimed at compact sedan buyers — expected
to sell 45,000 to 50,000 units.

FUTURE OF MAHINDRA SCORPIO:

• Automobile manufacturer Mahindra is preparing for multiple launches of updated versions

of its classic cars. Among those is the new-gen Scorpio, covered in heavy camouflage.
• This indicates that the SUV could continue its ladder-frame construction but is expected to
undergo severe weight-loss. It is also expected to be powered by the new BSVI compliant
2- litre diesel engine, which makes up to 160PS of maximum power and 320Nm of peak
torque.
• However, Mahindra could detune the engine slightly to better suit the Scorpio.
Transmission is expected to be a new six-speed manual unit, with an optional automatic
gearbox. Mahindra seems to have retained the familiar look of the Scorpio, which is why it
carries forward its upright nose, pillar, flat bonnet and roof. It also gets a black mesh grille
and XUV500 themed inserts. The rear also gets an angular windscreen along with LED
taillights.
• Though not much has been revealed about that car, it can be expected to face a rise in its
price, considering it will be offered with ABS, EBD as well as two airbags as standard. The
Scorpio had debuted in 2002, after which it became one of India’s most beloved SUV. The
2020 Mahindra Scorpio is expected to enter production by the end of this year, after which it
should be introduced in the Indian market by 2020.
 SALES AND DEMAND FORECASTING

According to June 2019 report of Mahindra & Mahindra the following data was sales data was
observed in comparison with last financial year:
• Exports went down by 22 percent.

• Passenger vehicle segment, commercial vehicle segment and medium & heavy commercial
vehicle segment saw a decline of 1, 5 and 45 percent respectively.
 SWOT ANALYSIS OF MAHINDRA SCORPIO

SWOT analysis is a method to monitor the internal and external marketing environment. Following
is the SWOT analysis for Mahindra Scorpio:
STRENGTHS:
• Very low maintenance cost with tough architecture look.

• Excellent smooth driving performance in hilly, rural and highway roads.

• It has well designed seating arrangement.

• Good performance for long distances.

• Powerful player in taxi/ rental business.

• Good presence in rural and tiered-2 cities.

• Loyal brand positioning with good number of service stations.

WEAKNESSES:
• It has a very limited international market.

• Geographic dependence.

• Product recall affects brand

image. OPPORTUNITIES:
• R&D department to introduce new technical features, thereby enhancing the design.

• Increasing the purchasing power and attraction of customers towards buying heavy cars.

• Introducing fuel efficient models; CNG models.

• More advertising leveraging strong brand presence.

• Increasing purchasing power and target

base. THREATS:
• Increasing competition with global players.

• Increasing fuel prices.

• Slump in the automobile sector.

• Government regulations.

• Improvement in public transports.

• Increasing demand for electric vehicles.

 MARKET CAPEX

• Mahindra to invest Rs. 18,000 crores in the next 3 years as it expects the current market
slowdown to come to an end soon. The Indian manufacturer has pumped up its
investment for the next 3 years by 20 percent as it expects that the growth will return
strongly to the market.
• A short term investment for one quarter is difficult but when a 7 percent GDP is expected,
a certain investment should be made.
• Mahindra has declared its fourth-quarter results and had predicted better growth than the 3-5
percent in the passenger vehicle segment and 10-12 percent in the commercial vehicle
segment.
• The company is increasing its capex and investment by 20 percent over a 3-year cycle.
They have not slowed down on the development of new products and have continued to do
so with the same vigour as they have done in the past.
• Mahindra is getting a new paint factory at Chakan that is capable of painting 3 lakh units a
year and trim chassis final line.

LEARNING OBJECTIVES

The preliminary research and desk research will help us to develop a base for understanding
of how market economy works and how we as managers affect businesses to drive profit
and managing resources for the best of its use. We attempt to study and develop an
understanding of the following factors:
• Understanding the market scenario to track supply - demand chain of the company's product
line.
• How the supply chain works.

• How various product distribution channels work.

• The marketing strategies that a company incorporates to make its presence on a local as well
as a global level.
• How to ensure customer satisfaction.
 SOURCES OF DATA

• https://www.mahindra.com/
• https://www.capitaline.com/
• https://prowessiq.cmie.com/
• https://www.moneycontrol.com/
• https://autoportal.com/

The data which we have collected is satisfactory in terms of time period and availability. The
data can be easily accessed through website links which we have specified here and the data
is very much relevant for the current time period as it mostly revolves around 2019.