In Conversation: Anand Mahindra on M&M's automotive aspirations

The European automotive scene, mired as it is in absolute stagnation, is poised to see some cheer, especially as it has an Indian connect and that comes via Mahindra & Mahindra. The venerable maker...

 

 

SsangYong Korando

 

AJD:

That must be the biggest secret success story ever in this business, hardly anyone knows it!

 

AM: People don’t know it, it’s an over thousand crore rupee business, the brand is getting known, we are competing with the best in the industry... there what was the secret? Engines, knowledge of our engines and it was interesting Reliance Communications chose us first as an engine for their telecom towers because their analysis showed them our engines were the best in the country. So coming back to your question, this is not an advertising slogan, we have at the core, and at the heart of it all is our knowledge of engines which allows us to go into all mobility areas. We will bring that engine capability even into our sea business, into our motor business, into the boat business and I won’t say we are the newest in this; I think frankly Honda’s done this some time ago. Honda spans the same stretch, they are not in heavy trucks but otherwise apart from that they also span the entire spectrum. So this is where we are now, the second reason why apart from engines…

 

AJD: Speaking as you do about engines, you singularly lack petrol engines because that is a big market area where you are absent from right now.

 

AM: Let me put it this way; I can’t give away secrets, but in a very short while you will find that gap doesn’t exist in the Mahindra portfolio. And as you know even in, SsangYong it is also primarily a diesel-driven portfolio, but they also have a petrol product so between our entire group we now have the economies of scale to develop gasoline engines as well. And what I want to come back to apart from the engine the real advantage that I see in the mobility business is that there is a very tangible benefit in economies of scale. We are still a small company; don’t forget we are going up against people who make a million, two million cars. We get economies of scale by being in various mobility areas, whether it’s engines for tractors and for automobiles and now for trucks and also for parts sourcing, for R&D, for engineering, for logistics, for a whole variety of back end things we get huge economies of scale and we can mimic the scale that larger, more established western players have had. So to me there is a very strong left brain tangible reason for this, it is not a pretty advertising slogan.

 

 

Mahindra 2 Wheelers

 

 

AJD: What about two-wheelers? That is a growth area, you are the youngest entrant into the business, you have shown a lot of promise but you need to execute that in a very tangible form on the road, plus you have also gone motorcycle racing which no one dared dreamed of doing.

 

AM: Absolutely, we have to be different Adil. You I’m sure have advised me in the past about that and that is true that when new entrants come in you have to be different, disruptive, attempt things others won’t and we will certainly live up to that. When you do that sometimes, you have issues where you don’t meet with as much success as you like but I think with what we at Mahindra have, is the resources, the engineering know-how, and the wherewithal and the ‘Rise’ courage to ensure that we will succeed in this business. We are marathoners you know that, even with the Logan when people wrote it off as a failure, today as the new Verito it is an unqualified success. And the potential is enormous. So we have learnt that when you are humble, when you learn from your mistakes, but you don’t give up and you are determined to rise, you will succeed. And that will apply to our two-wheeler business as well.

 

AJD: I see a lot of humility in what Mahindra does but I also see a hunger in everything it does plus I also see, unlike many other companies where the human resource is empowered from within. Is it just a fancy aura being created or is it really the meat of the matter? Because, at the end of the day you really need the human resources!

 

AM: Absolutely, you know you could not have grown the way we have; sometimes I am very pleasantly surprised myself when I sit down and look at how much we have grown. We were, when I joined the company less than a billion dollars and well under a billion dollars, and today it’s just above 16 billion globally. You cannot have that kind of growth if you try and do everything yourself or if you run a one man show or if you have a hierarchical structure. You can only grow at that speed if you trust people, if you empower them. So it has to be real, it cannot be words or phrases because the proof of the pudding lies in how we have grown. And I like to think that this is a DNA of the group. Right from our founders, they’ve started as a team of people who are professionals. They hired people with great education to become part of the founding team. Everyone was equal in that team so I think that DNA right from 1945 has continued. Mr Keshub Mahindra followed the same thing. He was a hands-off chairman for many many years and so there is a legacy which is very hard to over-ride in Mahindra, which is about empowerment.

 

by Adil Jal Darukhanawala Posted on 19 Sep 2012
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