We aim to build end-to-end global two-wheeler business

Written by Malabika Sarkar | Malabika Sarkar | Updated: Oct 4 2009, 02:43am hrs
Mahindra & Mahindra (M&M) has recently forayed into the two-wheeler market. Anoop Mathur, president, two-wheeler sector, M&M, is optimistic about this new business venture. He talks about the companys plans with FEs Malabika Sarkar:

When do you plan to enter the motorcycle segment

Mahindra Two Wheelers will be present across all segments of the two-wheeler industry over the next three years. We have recently extended our scooter portfolio with the launch of Mahindra Rodeo and Mahindra Duro. We plan to enter the motorcycle segment by FY 2011.

The core emphasis of the two-wheeler portfolio of MTW will be automatic scootersa segment that Kinetic helped create and later dominated before the Japanese competition walked in and took over. What are your plans to reclaim that market

The Mahindra Groups venture into the two-wheeler segment began with the acquisition of the business assets of Kinetic Motor Company (KMCL). Our intent has been to be a credible player in the Indian two-wheeler industry. We would aim to build a robust end-to-end global two-wheeler business with presence in all product segments. We will design and market a range of scooters, value-engineered motorcycles and high-end motorcycles for Indian as well as global markets. MTW will offer differentiated products with more value-enhancing features to the consumers. We will offer products with good technology, superior design and styling, and strong after-sales service. We believe in and are committed to innovation, customer centricity and delivering trust, reliability and excellent value for money to its customers.

Where do two-wheelers fit in in Mahindra groups strategic growth plans

Mahindras foray into the two-wheeler sector leverages M&Ms 62 years of automotive manufacturing experience. For Mahindra, two-wheelers are an additional touch-point for consumers to interact and bond with the ever-expanding universe of Mahindra products & services. Within the automotive space, it allows M&M to engage and build relationships with customers at a relatively early stage of the personal transport solutions value chain. This will give an opportunity to place Mahindra in every household, given M&Ms dominant presence in the rural and semi-urban segments and Mahindra Finances extensive reach in these markets.

MTW has tremendous back-end synergies, thanks to its long-standing supplier base, and at the front-end because of the dealer network of CVs and passenger cars. What kind of advantage does this offer to MTW

MTW is working in a structured way to leverage the synergies within the M&M group. We are working closely with Mahindra Finance to provide retail financing to our consumers. We are also working with the Mahindra Systech sector to gain efficiencies in our inbound supply chain and sourcing. Engines engineering is already involved with all the R&D activities at MTW. We are working with the auto sector and the farm equipment sector to enhance our dealer network. We are also in talks with Bristlecone technologies for supply-chain solutions. Overall, the synergies with the M&M group will help us achieve a competitive advantage while making us a credible player in the industry.

M&M has a wide range of vehicles, including MUVs, LCVs, passenger vehicles and three-wheelers. Why and when did you plan to foray into the two-wheeler segment

We formally took over the business assets of the KMCL on November 18, 2008. The two-wheeler industry is the current bright spot in the automobile sector. After the slowdown in 2008, the two-wheeler industry bounced back from February 2009 onwards. M&M is bullish about the growth rates of the two-wheeler industry. Our market study before entering this segment had shown that the fundamental demand drivers of this category will remain robust and hence the segment will continue to grow at a double-digit rate. The primary contributors to this growth story have been improvement in quality and technology, easy availability of finance and an increased need for personal transportation. India has a predominantly young population. This, coupled with low penetration levels, provides a significant head room for growth.

The company is looking at exporting two-wheelers. Can you share your plans in this respect

Being a new entrant, our initial focus will be to tap the potential of the vast domestic market. We are in the process of developing our exports strategy for the long term. We are studying various international markets to prepare a roadmap.

You are also planning to source components from China. What would be the percentage

China is a low-cost option for sourcing of components and we will leverage the cost competitiveness of China wherever possible.

Mahindra is already planning to set up a two-wheeler plant in tax-free states like Uttarkhand and Himachal Pradesh. By when can we expect these plants to be operational

This is speculative and we would not like to comment. Our current two-wheeler facility is in Pithampur, Madhya Pradesh. The current capacity will suffice us for the next few years.

Currently you have a capacity of 5 lakh units at Pithampur, which you got with the acquisition of Kinetic. Any plans for capacity expansion

We are studying various options for expanding our capacity which includes expansion at our existing plant in Pithampur.