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Aussie focus for Mahindra exports

Next steps: Mahindra rates Australia’s highly competitive market, discerning customers and harsh environment as a tough testing ground for proving its products will pass muster for other export opportunities.

Mahindra prioritises Australia, New Zealand as top 10 key strategic export markets

10 May 2016

ALTHOUGH Indian auto-maker Mahindra dominates its home SUV and ute segments with an iron grip that makes Toyota’s Australian commanding market share look weak, and has so far struggled to sell more than 500 units annually here, it regards Australia as among its 10 key strategic export markets.

Like a number of manufacturers from other developing countries, notably China, Mahindra sees Australia as a great proving ground for its products that helps it prepare for a push into other mature markets such as Europe and North America.

Visiting Australia for a media preview of the automatic XUV500 family wagon in Brisbane last week and speaking exclusively with GoAuto, Mahindra Automotive CEO Pravin Shah said his company’s dominance of the competitive Indian market had provided the confidence to explore opportunities overseas.

Part of the plan was the establishment of design and development centres in Detroit and Turin, the latter a separate entity to the Pininfarina design house and coachbuilder that Mahindra acquired late last year.

“We need to tune the organisation to be competent enough to cater to the developed markets,” he said.

“You need to recognise those unique and specific requirements and incorporate them into the development process to give products a global footprint.”

In addition to product testing and development, Mr Shah said generating media coverage in English-speaking markets was an important brand-building exercise.

“For becoming a global brand, the English-speaking markets help us because Australian media coverage goes straight into India, Britain, United States,” he explained.

“We had a launch in New Zealand earlier this week and immediately what went out on social media emanated to all those English-language markets and was picked up, so you can see from this why Australia is a strategic market.”

Mr Shah told Australian journalists at the XUV500 event that this country “is a long-term critical and important market as part of our globalisation plans and are writing our own history by being physically present with our subsidiary called Mahindra Automotive Australia”.

 center imageLeft: Mahindra Automotive CEO Pravin Shah.

“We have very ambitious global aspirations and one of those is to be among the top 50 most admired brands by 2021. The journey to that is a robust globalisation plan, and part of that is Australia and New Zealand as focus markets,” he said.

Mahindra Ag and Auto Australia national manager Mahesh Kaskar added that after spending five years working in this country, “it is probably the toughest market in the world”, but that the brand remains committed.

“We know what needs to be done for this market and we are serious for this market,” he said.

“We know we have a long way to go and we are happy we have the dealership network associated with us and the company is really keen to establish itself in Australia, with the toughest auto market in the whole world with the most stringent requirements in the whole world.”

Although a Western Australian importer experimented with Indian utes in the early 1990s, Mahindra as it is known today entered the Australian market in early 2007 through a joint venture with Sydney-based dealer group TMI Pacific.

In late 2008 Mahindra expand its stake to 80 per cent before taking over completely in 2011 and rolling its agricultural machinery and automotive operations into one Brisbane-based subsidiary.

“In Australia the ute industry is between 120,000 and 140,000 units per year, it’s a big industry,” said Mr Shah. “The Indian market is crowded, yet Mahindra has a 42 per cent share in SUVs and 70 per cent share in the ute market.

“We being an SUV and ute specialist brand, obviously Australia is a very good market for us to test our quality and product, so by entering into the commercial space, like with utes, you can test out your drivelines and product performance … It gives the opportunity to test the water.”

Asked whether Mahindra was considering a factory-owned distribution arrangement for the South Korean SsangYong SUV and ute brand it rescued in 2011, Mr Shah said that company “has its own growth plans and market entries”.

He said there was a “synergy committee” of representatives from both brands “looking at the possibility of sharing platforms, engines, transmissions, component sourcing and looking at distribution opportunities”.

Mr Shah did not rule out the possibility of one day taking over Australian distribution rights from Sydney-based SsangYong importer Ateco Automotive, which due to price disagreements with the factory is yet to introduce the Tivoli compact SUV to this market despite gaining Australian Design Rule approval as far back as 2014.

He pointed out that, like Australia, the South African Mahindra distributor is 100 per cent factory-owned, but that is also serves as the importer and distributor of SsangYong vehicles in that country.

“Both brands keep their identities intact and separate,” he emphasised.

“I think we’ll keep observing, keep evaluating opportunities (in Australia) without compromising how the SsangYong and Mahindra brand can exist, then make one plus one equal 11 rather than two.

“Change depends on the opportunities and how effectively one can pursue and execute.”

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