Mahindra & Mahindra sells its cars DNA to drive sales

Written by Aveek Datta | Mumbai | Updated: Jul 2 2014, 14:22pm hrs
MahindraParticipating in worldwide events like MotoGP and Formula E also helps create brand recall for M&M globally
Indian carmaker Mahindra & Mahindra (M&M) has seen the sales of its passenger cars, especially it sports utility vehicles (SUVs) speed past competitors largely on the back of some solidly built offerings and smart pricing. But one other reason that has contributed to a cult-like following for some of its cars, like the Thar and the XUV500, has been an effort on the part of the company to offer young motoring enthusiasts (not necessarily in age, but at heart) the chance to take the road less travelled.

In what the company terms as efforts towards experiential marketing, M&M has been actively promoting off-roading events for its SUVs through a division called Mahindra Adventure, and participating in world motorsport championships through a division called Mahindra Racing.

The idea is to convey a sense of what M&Ms vehicles stand for, build a globally recognisable automotive brand and facilitate technology transfer into the company that will enable it bring out advanced offerings like high-calibre bikes and electric vehicles in the future.

Around four years back, Mahindra conducted an internal study to evaluate how best to cement the tough, rugged DNA of its SUVs, and thats how the idea of starting Mahindra Adventure came about, says Bijoy Kumar Y, head of Mahindra Adventure. That is the time when Bijoy, a former motoring journalist, moved to M&M and a small team was constituted under him.

M&M already had an adventure property called Great Escape, wherein customers could bring their own cars and drive through the picturesque Indian countryside across terrains like mountains and waterfronts under professional off-roading guidance from M&Ms own instructors.

The carmaker also has around 100 cars of its own that it offers to participants of these events who want to experience how a Mahindra SUV feels like in different terrains. A number of participants who drive cars of other makes expressed amazement at the terrain-handling capabilities of Mahindras SUVs, Bijoy says.

All that off-roading enthusiasts need to do to be a part of these events, which happen around the year in India and even in neighbouring countries, is to log on to the Mahindra Adventure website, register and pay the fees.

To make things more interesting Mahindra Adventure decided to make some of its events competitive by constituting an off-roading trophy. Races are held across India and a winner is selected from each of four zones. These winners come together for the grand finale held at a sprawling 28-acre off-roading academy built by M&M in Igatpuri, near Nashik in Maharashtra, and the winner of this event takes home a Mahindra Thar.

Indeed, the off-roading academy itself is another extension of M&Ms experiential marketing strategy. Motoring buffs interested in learning the technique of off-road driving in four-wheel-drives can come here for regular courses held over weekends and train themselves in the art of driving in areas where roads havent reached.

Not only has M&M made the adventure events using its SUVs competitive for leisure drivers, it has also decided to prove the mettle of its engineering by participating in professional motorsport rallies, some organised by rival carmakers like Maruti Suzuki as well.

In some of these rallies, M&Ms diesel SUVs took on the might of petrol-fuelled SUVs and won top honours (petrol is a more efficient fuel with higher combustion power than diesel), Bijoy stated. At last years Indian National Rally Championship as well, Mahindras SUVs clocked the fastest time in most of the races.

While the company does invest some if own resources to organise these events, it is also a self-financing exercise through avenues such as fees received from participants and advertising revenue from partners like tyre and car lubricant manufacturing brands.

Bijoy says that Mahindra Adventures rally team aspires to eventually participate in international rallies and the big dream is to participate in the Dakar Rally, one of the oldest and biggest rallies in the world, held in South America.

While Mahindra Adventure is all about showcasing the spirit and strength of the companys well-established SUVs, the Anand Mahindra-led companys endeavours in motorsport are more about building a brand recall for its products globally, acquiring cutting-edge technology and putting it to use for future product development.

Mahindra Racing, as the conglomerates motorsport division is called, is currently present in MotoGP racing for superbikes in the 250cc category.

It is soon going to enter the Formula E series, a racing series for electric cars being organised for the first time this year by the Fdration Internationale de l'Automobile (FIA), the international automotive federation that also organises the hugely popular Formula 1 championship. The company announced in May that it had signed on Indian racer Karun Chandhok and Brazilian Bruno Senna as its drivers for the championship, slated to begin in September.

Interestingly, M&Ms actual offerings in the two-wheeler and electric vehicles segments have little in common with the high-performance machines that it will associate with through Formula E or the superbikes it showcases through MotoGP. This begs the question: How does association with motorsport help the company

We entered the racing arena three years back, just a year after entering the two-wheeler business, said SP Shukla, chairman of Mahindra Racing. We chose to enter racing because it is the only sport that presents a blend of youth, energy and technology, and this was in line with the youthful, energetic and high-tech sheen that we wanted to give to the Mahindra brand.

One of the biggest benefits that Mahindra has derived due to its participation in motorsport is the technology transfer from the racetrack to the road, which has helped the conglomerate improve the safety and reliability of its cars and bikes.

The new technology that M&M internalises by being a part of these motorsport events will also help it in future product development and bringing out offerings more akin to the superbikes and cars that the spectators of these sports hold in awe.

It is true that the products that are used in racing are more high-tech than what you see on the roads. That is what makes these racing cars and bikes aspirational and that is what allows transfer of technology to standard products, Shukla said. We are participating in the 250cc category as far as bike racing is concerned, which is a very relevant market in India. Yes, there will be plans to introduce those models in India.

It helps that M&Ms bikes have won some laurels in its professional racing pursuits. It has already won the Italian Championship twice in the second and third year of participation. In the Moto 3 Constructor Trophy (the category for 250cc bikes) last year, it came third.

On the other hand, Mahindras association with Formula E is more to do with rectifying a perception that overshadows electric cars of being slower and less exciting to drive than their counterparts that run on conventional fossil fuels.

Unlike its role in MotoGP, M&Ms association with Formula E in its first year of the series, like that of the other participants, will not be as a constructor of the cars. It will be funding the team, selecting the drivers and overseeing the running of the electric racing car on aspects like battery management, simulation and telematics.

The idea is to let the audience see how electric cars can reach from 0-100kmph in three seconds and zoom at speeds of 225 kmph on city streets, said Chetan Maini, founder and chief executive of Mahindra Reva Electric Vehicles. The technology gap between the racetrack and roads is smaller and easier to bridge when it comes to electric cars and we will implement key learnings from dealing with the battery management, simulation and systems operations of these race cars into the electric cars we make in the future.

The only electric car that M&M commercially sells at present is the Mahindra Reva E2O, a cost-effective, compact hatchback, but with limited capability in terms of power and speed. Both Maini and Shukla concurred that M&M will be launching new electric cars with higher power and speed based on the research and development work that goes into ensuring success of the Mahindra team in Formula E. In the second year of this new racing series Mahindra will be participating as a constructor.

M&M executives do not divulge exact numbers as far as the level of investment involved in its racing and adventure activities is concerned. A lot of it is indeed recovered through sponsorships and the rest is treated as branding and marketing expenditure.

It is a multi-crore investment, said Shukla. Most of the events happen outside India, especially Europe, so you can say that we have spent several million euros towards our racing activities.

Participating in worldwide events like MotoGP and Formula E also helps create brand recall for M&M globally. This not only helps the companys automotive business but also helps it showcase some of its other enterprises like information technology (IT) firm Tech Mahindra as well (since motorsport relies heavily on a robust IT backbone).

Formula E races, for instance, will be held in the streets of cities like London, Berlin and Monaco, whereas Moto 3 races are held in regions like Europe, North America, Asia and Australia.

These are all markets where either we are already present, or are looking to enter, Maini said.