Mahindra Automobiles Segment

In 1947, Mahindra introduced India to the utility vehicle.  More than 65 years later, we're

still India's premier utility vehicle (UV) company, but we've also grown quite a bit. In

addition to making groundbreaking UVs like the Scorpio and Bolero, Mahindra offers cars,

pickups, and commercial vehicles that are rugged, reliable, environmentally friendly, and

fuel-efficient. Our global presence means you can find Mahindra vehicles on the roads—both

paved and unpaved—of Australia, Europe, Latin America, Malaysia, South Korea, and South

Africa. And we're seeking out new terrain every day. 

Mahindra is also there for you through the construction of excellent components, provision of

spares, and commitment to superior service.  Our automotive businesses cover all your

transportation needs thanks to strategic synergies between our expertise in design,

manufacturing, and service.

Mahindra & Mahindra Limited (M&M) is an Indian multinational automobile manufacturing

corporation headquartered in Mumbai, Maharashtra, India. It is one of the largest vehicle

manufacturers by production in the Republic of India. It is a part of Mahindra Group, an

Indian conglomerate. The company was founded in 1945 in Ludhiana as Mahindra &

Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik Ghulam Mohammed.

After India gained independence and Pakistan was formed, Mohammed emigrated to

Pakistan. The company changed its name to Mahindra & Mahindra in 1948. It is ranked 21 in

the list of top companies of India in Fortune India 500 in 2011.

Major competitors in the Indian market include Maruti Motors (a 60% owned subsidiary of

Suzuki Motors from Japan), Tata Motors (fully owned by Tata Sons; Owner of Indian-British

Jaguar Land Rover), Toyota, Mercedes-Benz (Merc) (Based in Poona, Maharastra in India; A

subsidiary of Daimler AG from Germany) and others.

Further the Sales and Distribution of cars into the Price segment of 5 lakhs and 8 lakhs is

represented with the pie charts.

SUV Car Segment and Driving forces

The utility vehicles (UV) are spearheading the growth in the passenger vehicles (PV)

segment in Indian car market. The promising growth of UVs at 54.5 per cent as against PVs

paltry 4.1 per cent in the 11 months of the 2012-13 has forced car makers to align their

business strategy to tap the segment.

In the 11 months of the 2012-13, the UV volumes grew by 54.5 percent as against PVs 4.1

percent. According to SIAM data, Passenger Cars segment has shrunk from 78.9 percent in

FY11 to 70.6 percent till February 2013. In the same period, UV and multi-purpose vehicles

(MPVs) segment has grown from 21.1 to 29.4 percent.

Maruti Suzuki’s company’s strategy is to regain market share with new SUV and MPV

launches. And it is already working with Ertiga selling over 70,000 units this fiscal (2012-

13). “The SUVs and multi-purpose vehicles segment has been growing very fast in India, but

Maruti is not growing there. It needs to have a stronger presence there. Having just the Ertiga

is not enough.”

But, what is triggering India’s largest car makers and others to shift focus on the SUV

segment? The segment comprises roughly 30 percent of the PV pie which is 70 percent of the

total auto sales. Are we experiencing a tectonic shift in customer preferences – from sedans to

SUVs?

Ajay Shethiya, an auto analyst at Mumbai-based Centrum Broking agrees and suggests that

shift has already happened. While Mahindra & Mahindra’s launch of the XUV 500 was the

game-changer, the creation of the compact UV segment, hitherto non-existent, became the

key growth driver. The entry of the likes of Maruti Suzuki Ertiga in April 2012 and French

car maker Renault’s Duster in July 2012 unleashed customer fancy for an urban SUV.

“The larger role in shift of consumer preference was triggered by Mahindra’s XUV 500 and

thereafter Renault’s Duster has boosted the excitement. There was a lot of excitement which

was created on the back of product launches,” he affirms. More product launches are

scheduled in the UV space in the near term to take advantage of the rising segment. Some of

the anticipated models (apart from Maruti Suzuki) are Ecosport from Ford Motors, Chevrolet

Enjoy, Volkswagen’s Taigun, Ashok Leyland Stile and a Duster-type SUV from Nissan.

While a slew of product launches are scheduled in the UV space, the growth in the segment

may moderate in 2013-14 as the impact of negative policy measures will become more

prominent in coming months.

“The growth in the UV segment is likely to begin levelling-off from Q2 2013-14 onwards

due to the combined impact of a high base, rising diesel prices and higher excise duty on

SUVs imposed in the Union Budget for 2013-14 (duty increased from 27 percent to 30

percent). However, the segment may still grow faster than the PV industry as a whole.”

You need a right product at right price point. With introduction of Maruti’s Ertiga, Renault’s

Duster, and the upcoming launches there are lot of options available to the customers. The

growth rate in UV segment will continue but it will moderate from what you are seeing right

now.

Levying heavy tax would discourage the acceptance of the road-occupying, extra-polluting

SUV’s? This not only proves that the SUV’s still enjoy the equity of higher value proposition

among Indian car buyers, but also highlights that the SUV-craze is here to stay. Bolero,

Fortuner & Innova registered their all-time best sales figures. Scorpio, Pajero Sport, Rexton,

Xylo & Sumo performed abover average as well!

However, in concise for F13 – Indian Automobile Industry has been in one of the most

difficult times. We have seen the most promising OEMs (name Tata, GM, etc) tumbling in

their sales charts and the market has aptly thought a lesson – ADAPT & EVOLVE is the key

and being agile is the need of the hour. The growth trajectory of every OEM was dependant

on having an exciting NEW offering in the portfolio – the product being a SUV/MUV can be

the icing on the cake.

“The slowdown of economy is impacting vehicle sales. Against large base of last year, there

was a sharp drop in conversion of enquiries in the absence of any positive stimulus

andsentiments," HMIL Vice President (Sales and Marketing) Rakesh Srivastava said. Any

proof on why Indians are termed ‘sentimental’? Yes, negative sentiments can shake an entire

industry in the country. The point to be noted is decline in Enquiry levels and also poor

conversion ratio of the received enquiries.

Maruti Suzuki – Can you believe that Maruti Suzuki posted a de-growth after selling 1.19

Lakh units (including exports)? The situation would have been worse if the UV portfolio

wouldn’t have been introduced with Ertiga. The Life Utility Vehicle has proved to be the life-

line for MS. Ertiga clocked >6k numbers after a long time. Maruti introduced discounts for

the first time for the star model. Dzire exceeding the offtake numbers of Swift – this was

predicted well before. Value consciousness has gone to a different level. The increase can

also be attributed for MS focus on increasing Dzire supplies in lieu of the launch of Honda’s

Amaze. Alto creates a new benchmark in the industry - It's been only four months (124 days

to be precise) that Maruti Suzuki launched the all new Alto 800, and the model sold over 1

Lakh units. Wagon R, Alto, Ritz volumes prove that petrol models have regained traction and

still can emerge victorious.

Mahindra & Mahindra had its own set of highs and lows – while Bolero clocking its ever

highest billing volumes, Quanto & XUV 500 saw its 3 consistent decline in past 3 months.

The volumes of Quanto went below Xylo’s number – not exactly a good sign. XUV 500 had

a earnest recall for replacing some parts and was appreciated by all – but did it affect the new

customer confidence? The decline in its volumes posed a serious concern for the OEM.

Rexton offtake figures were laudable – the brand has gained respectable volumes of over 450

numbers consistently and has proved to be a worthy opponent to the mighty Fortuner.

Toyota surprised us all – Over 8k figures for Innova proved that the new kids in the block

(say Duster, Ertiga or XUV) couldn’t shake the old stalwart. Fortuner had a mean smile for

the increased excise duty – over 1.7k numbers for the premium SUV is just WOW (the

volumes are higher than its half priced Storme!). 30 nos. for Landcruiser – It happens only in

India . The upgraded Etios and Liva siblings ensured 70% & 129% growth month-on-month

for the brands respectively.

Objectives

1. To study different factors preferred while buying a car

2. To study the reasons for failure of Mahindra Quanto car in SUV segment

3. To study SUV car segment

Hypothesis

Null Hypothesis