Mahindra & Mahindra †Sm Essay

1. administrator SUMMARY INDIAN AUTOMOBILE INDUSTRYStarting its journey from the mean solar day when the freshman cable cable auto rol take on the streets of Mumbai in 1898, the Indian gondola labor has demonst posed a phe noneenal maturation to this day. Today, the Indian car industry presents a galaxy of varieties and models inviteing either workable expectations and orbicularly ready industry standards. Some of the leading take a craps echoing in the Indian machine industry include Maruti Suzuki, Tata travels, Mahindra and Mahindra, Hyundai Motors, Hero Honda and Hindustan Motors in revoke to power to a image of differents. During the early s pass overes of its instruction, Indian cable car industry intemperately depended on unlike technologies.However, everyplace the forms, the bers in India stomach started victimization their ingest applied science evolved in the native soil. The thriving trade place in the sphere has attracted a subject of automobile manufacturers including near of the reputed global leaders to set their foot in the soil looking forward to compound their profile and prospects to refreshing(a) heights. Following a temporary setback on account of the global economic street corner, the Indian automobile trade place has at a time again picked up a re take noteable momentum witnessing a successful barter for the - maiden time in its history in the month of family 2009. At present, almost 75 percent of Indias automobile industry is made up by pure cars, with the figure ranking the verdant bea on top of each other country on the globe. over the adjacent devil or trine categorys, the country is expecting the arrival of more(prenominal) than a dozen red-hot vanes making compact car models. identical many other nations Indias amplyly create transportation governance has played a very important role in the organic evolution of the countrys miserliness over the past to this day. One peck say that the automobile industry in the country has occupied a solid space in the course of study of Indian economy. Empowered by its present driveth, at present the automobile industry in the country move produce a diverse scat of fomites down the stairs trey commodious categories namely cars, both- wheelwrights and heavy vehicles. 1.1. Exports of Automobile IndustryToday, India is among the cosmoss largest manufacturers of small cars. The New York sentences has rated India as a very unbendable design base with an incomparable expertise in the arena of manufacturing a number of low-cost, fuel-efficient cars has encouraged the expansion conceptions of the manufacturing facilities of a number of automobile leaders fate Mahindra, Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki. bandage the automobile industry in India is the ninth largest in the world, the country emerged as the fourth largest automobiles exporter on the globe following(a) Japan, South Korea and Thailand, in the year 2009. The automobile sector of India is the seventh largest in the world. In a year, the country manufactures virtually 2.6 jillion cars making up an identifiable ball in the worlds annual point of intersectionion of round 73 zillion cars in a year.The country is the largest manufacturer of motorcycles and the fifth largest producer of commercial vehicles. Industry experts admit visualized an unbelievably huge ontogenesis in these figures over the immediate future. The figures published by the Asia Economic wreak indicate that the Indian automobile sector is set to emerge as the global leader by 2012. In the year 2009, India rose to be the fourth largest exporter of automobiles following Japan, South Korea and Thailand. Experts state that in the year 2050, India leave top the car intensitys of all the nations of the world with about 611 million cars political campaign on its roadstead. 1.2. Various Segments of the Indian Automobile Indus try Motor cycles manufacture makes up the study handle in the two-wheeler sub course of study of theIndian automobile industry. to the highest degree 50% of the motorcycles are manufactured by Hero Honda.While Honda manufactures about 46% of the scooters, TVS produces 82% of the mopeds soak upning on the Indian roads. About 40% of the lead-wheelers manufactured in India are utilize for transporting genuines with Piaggio manufacturing 40% of the vehicles exchange in the Indian commercialize. On the other hand, Bajaj has emerged as the leader in manufacturing three-wheelers hired for rider transport. The firm produces about 68% percent of the three wheelers used for passenger transport in India. The Indian passenger vehicle share is dominated by cars which make up about 80% of it.Maruti Suzuki manufactures about 52% of passenger cars plot of ground the firm enjoys a make love monopoly in the manufacture of multi- use of goods and services vehicles. In the avail vehicles element Mahindra makes up a 42% share. Tata Motors is the leader in the Indian commercial vehicles grocery store while it holds more than 60% share. Tata Motors to a fault enjoys the credit of being the worlds fifth largest manufacturer of medium and heavy commercial vehicles. 1.3. Potential of Indian Automobile IndustryThere is a very stiff contention in the automobile industry segment in India. This has serve healthfuled many to pull in their dreams of drive the most luxurious cars. During the youthful past, a number of oversea companies pee started grabbing a big chunk of the foodstuff share in both home(prenominal) help and export gross revenue. Every tonic day dawns in India with some untested launches by active thespians in the Indian automobile arena. By introducing some low cost cars, the industry had made it possible for common men to buy cars for their personal use.With some innovative strategies and by adopting some alternative remedial measures, the Indian automobile industry has success fully come unaffected out of the global pecuniary crisis. During the sure fiscal year, the Indian automobile industry rode high on the resurgence of consumer carry in the country as a result of the Governments fiscal stimulus and attractively low interest rates. As a result the total turnover of the home(prenominal) automobile industry change magnitude by about 27 per cent. Predictions made by Ernst and Young lose estimated that the Indian passenger car market place exit have a growth rate of about 12 percent per annum over the contiguous five historic period to collide with the intersectionion of 3.75 million units by the year 2014.The analysts have further stated that the industrys turnover provide raise $155 million by 2016. This achievement go forthing pull round in consolidating Indias position as the seventh largest automobiles manufacturer on the globe, eventually surging forth to become the third largest by the year 2030 behi nd chinaware and the US. The Automotive delegacy Plan launched by the Indian politics has envisaged that the country depart emerge as the seventh largest car maker on the globe thereby contri hardlying more than 10 percent to the nations $1.2-trillion economy. Further, industry experts believe that the nation willing soon establish its stand as an automobile hub exporting about 2.75 million units and selling about a million units to be operated on the domestic roads 1. MAHINDRA & MAHINDRA OVERVIEWMahindra & Mahindra (M&M) is not just Indias largest service vehicle manufacturer anymore. It is the third-largest player in the passenger vehicle segment and in a neck-and-neck race with Tata Motors. It has set its sight on challenging the control of Maruti Suzuki and Hyundai Motors. Pawan Goenka, as president for automotive and communicate up equipment sectors, is the main architect of this performance Mahindra and an independent India began their rise unitedly.In 1945, two en terp raise brothers named J.C. Mahindra and K.C. Mahindra joined forces with Ghulam Mohammed and started Mahindra & Mohammed as a steel ph unrivaledr in Mumbai. Two years later, India won its independence, Ghulam Mohammed left the confederacy to become Pakistans first finance minister, and the Mahindra brothers enkindled the companys enduring growth with their decision to manufacture Willys jeeps in Mumbai.The Mahindra brothers believed that new modes of transportation could be a see to Indias prosperity, so one of their first goals was to build rugged, simple vehicles capable of tackling the Indian terrain. primaeval pioneers of globalization, the brothers collaborated with a wide range of international companies and before long, Mahindras r from each one blanket(a) to steel, tractors, telecom, and more.Now, after(prenominal) 65 years, Mahindra has grown from a humble local outfit to a US $15.4 billion corporation employing more than 144,000 community around the world. It s been quite an ad imperil so far, and theyre imperial of our global leadership in utility vehicles, tractors, and information engineering, as sanitary as our material social movement in financial services, leisure and hospitality, engineering, trade, and logistics. As they accelerate into the 21st century, theyll address to pursue innovative ideas that enable mint to rise. Theyve come a long manner, scarce the journey has just begun. everyplace the past a few(prenominal) years, M&M has exaggerateed into new industries and geographies. They entered into the two-wheeler segment by taking over Ki lootic Motors in India. M&M excessively has unequivocal stake in REVA voltaic Car come with and acquired South Koreas SsangYong Motor society in 2011.Mahindra & Mahindra is a major(ip) automobile manufacturer of utility vehicles, passenger cars, pickups, commercial vehicles, and two wheelers. Its tractors are sold on six continents. It has acquired aimts in China and the United Kingdom, and has three assembly plants in the USA. M&M has partnerships with international companies like Renault SA, France and world-wide Truck and Engine Corporation, USA.M&M has a global carriage and its products are exported to several countries. Its global subsidiaries include Mahindra Europe Srl. based in Italy, Mahindra USA Inc., Mahindra South Africa and Mahindra (China) Tractor Co. Ltd.M&M made its entry into the passenger car segment with the Logan in April 2007 under the Mahindra Renault enunciate venture. M&M will make its maiden entry into the heavy trucks segment with Mahindra Navistar, the joint venture with International Truck, USA. M&Ms automotive di slew makes a wide range of vehicles including MUVs, LCVs and three wheelers. It lavcelleders over 20 models including new generation multi-utility vehicles like the Scorpio and the Bolero. It formerly had a joint venture with cut by convey of called Ford India Private Limited to build passenger cars.Mahindra & Mahindra has a absolute stake in Mahindra Reva Electric Vehicles. In 2011, it also gained a cont axial rotation stake in South Koreas SsangYong Motor Company. Mahindra & Mahindra Ltd. (M&M), has launched its much expect SUV, XUV 500, code named as W201 in September2011. The last 500 in the name is pronounced as 5 double-O (alphabet). The new SUV by Mahindra has been intentional in-house and it is genuine on the first global SUV platform that could be used for developing more SUVs.2. MISSION AND OBJECTIVESVision* To build a fully collaborative environment in which suppliers can deliver exactly what the company inescapably, when it needs it, and at a competitive cost. * We dont have a aggroup-wide mission statement. Our force purpose is what makes all of us want to get up and come to work in the morning -Anand Mahindra Mission* To create Indias largest automobile and automobile-related products dispersal network by providing dealers and customers with the largest alternative of unique world-class products and services.Since 1945, the Mahindra group has built the company around the outcome idea that people will succeed if they are just disposed(p) the opportunity. Employees across the conference constantly challenge conventional thinking to create solutions that make a significant difference in the lives of their customers. Thats why everything they buildbe it a tractor, financial service, solar-powered lamp, or softwareis designed to empower you to reach your potential.Internally, they follow three basic tenetsaccepting no limits, thinking alternatively, and driving positive change in everything they do. These brand pillars fall out all their actions and business decisions from deciding whether or not to enter a new field or planning a portfolio of services.* We accept no limits, and ask the same of everyone else. In return, they work relentlessly to provide the tools, information, and rapture to push past limitations and comfort zones. This challe nger spirit galvanized us to meet the oil crisis in the 1970s by re-engineering our fuel efficient tractor engines for utility vehicles. It led us to take on the challenge of designing the Scorpio utility vehicle at a cost that many industry experts vista was impossibly low.Theyve created completely new business models to enter areas others had written off or ignored, like our leading hospitality business and our rural financial services. And they just registered our highest ever profits condescension the worst global recession since the Great Depression. This determination influences every aspect of our culture and our employees. As a result, each Mahindra business constantly pushes the envelope and raises the bar as they pass on to deliver go cling to to our customers.* Alternative thinking means puzzle out problems in ways no one has thought of before, by using fewer resources and entering markets thought to be unreachable. Take the Scorpio for examplethey developed our best -in-class utility vehicle from the ground up using a exhibit that put dumbfoundrs needs first. Our Energy Solutions help businesses keep going when everyone elses lights go out. They build two wheelers that provide affordable mobility solutions to more people. And our wide arrays of innovative IT services are increasing productivity at some of the worlds leading companies. Thinking alternatively isnt perpetually easy, but its always worth it.* Driving Positive permute Mahindra is a business with a conscience. Every product they make and each market they explore must make sound economic sense, but it just so happens that smart business decisions are often good for people and communities as tumesce. They endeavour to spread positive impact through with(predicate) our products and services by greening our manufacturing process and by being a good employer. They want to be counted among the global companies that make incredible products and services, but they also wish to be rec ognized for creating a better world.From construction green homes with the most eco-friendly materials to providing loans to rural entrepreneurs, from designing goods carriers that run on flat natural gas (CNG) to offering educational programs and fundinging Indian theatre, they strive to make a positive impact on all the lives they touch They created a tractor designed for small do working that is enabling farmers to mechanize for the first time.Our motivation to give our best every day comes from our core purpose we will challenge conventional thinking and innovatively use all our resources to drive positive change in the lives of our stakeholders and communities across the world, to enable them to Rise.Our products and services support our customers ambitions to improve their living standards our responsible business practices positively engage the communities they join through employment, education, and outreach and our commitment to sustainable business is bringing green en gineering science and awareness into the mainstream through our products, services, and light- pace manufacturing processes.This commitment to sustain business leadersocial, economic, and environmentalrests upon a set of core sets. They are an amalgamation of what they have been, what they are, and what they want to be. These values are the ambit that guides our actions, both personal and corporate. They are* Good corporate citizenship They will continue to seek long term success in alignment with the needs of the communities they serve. They will do this without compromising on ethical business standards.* Professionalism They have always sought the best people for the job and given them the independence and the opportunity to grow. They will continue to do so. They will support conception and well reasoned risk taking, but will regard performance.* client first They exist and prosper single because of the customer. They will respond to the changing needs and expectations of our customers speedily, courteously and effectively.* Quality emphasis Quality is the key to delivering value for money to our customers. They will make quality a driving value in our work, in our products and in our interactions with others. They will do it First Time Right.* Dignity of the individual They will value individual dignity, upholdthe mighty to express dis symmetricalness and respect the time and efforts of others. Through our actions, they will levy fairness, trust, and transparency.3. SWOT Analysis4.1 Strengths* Mahindra has been one of the strongest brands in the Indian automobile mark. * Mahindra group give employment to over 110,000 employees. * Excellent branding and advertising, and low after gross revenue service cost. * Sturdy SUVs good for Indian roads and off-road terrain. * Over the years the company has emerged as one of the top players in the world in ground of number of tractors sold. This gives a clear variance that the companys market shares one of its biggest strengths.* The companys qualification to introduce new products in the market and to generate sales from those new products is a major strength. * The reason being that this is very essential for any company, for its survival in the long run. The company has establish its brand name in other countries of the world as well. * This is evident from the 40% market share that it holds in the 30-40 HP tractors market in the US. 4.2 Weakness* Mahindras partnership with Renault did not live up to international quality standards through their brand Logan. * The company is highly dependent on the rural sector, and the rural sector in turn is highly dependent on the monsoons. As a result, if there happen to be bad monsoons (less of rains) for two unbent years it could have an adverse impact on the consume of tractors for the company. 4.3 prospect* Developing hybrid cars and fuel efficient cars for the future. * Tapping emerging markets across the world and grammatical con struction a global brand. * Fast growing automobile market.* exploitation in the market through electric car Reva (controlling stake) and entry into two-wheeler segments. * The government has been trying to strengthen the exports of pastoral products. As a result, the quality of countrified products necessarily has to be very high. For this, they need better rural and agricultural infrastructure.This might result in anincrease in demand for tractors. * In India, the penetration of tractors is 10 tractors per vitamin C0 hectares of cropped area, which is much below the world medium of 19 tractors for the same. Thus there is scope for the demand to increase. 4.4 Threats* Government policies for the automobile sector across the world. * Ever increasing fuel prices.* Intense contention from global automobile brands.* Substitute modes of public transport like buses, pipe trains etc. * The company has a history of having invested in unrelated diversifications much(prenominal)(pren ominal) as telecom, holiday and resort inns, financial services, etc. which it has hived off as subsidiaries from time to time when these turned unmanageable. * This is a cause for concern as such(prenominal) diversifications could divert the companys attention from its core business. It is a dangerous tendency as it leads to destruction of shareholders value. * The entry of foreign players in the tractors segment could pose a threat to the company as these foreign players are technically more competitive than Mahindra & Mahindra.4. ACQUISITIONS5.1 Ssangyong Motor CompanyIndias Mahindra & Mahindra Ltd. completes learnedness of a majority stake in SsangYong Motor Company On March 15, 2011, Mahindra & Mahindra Ltd. (M&M), Indias leading manufacturer of utility vehicles, today announced that it has completed all formalities related to the acquisition of a majority stake in SsangYong Motor Company (SYMC) and that the company is no yearlong in Court Receivership. Mahindra had emerged a s the preferred statementder for SsangYong in dire 2010. This marks the beginning of a new journey for SYMC and will also pave the way for both Mahindra and SYMC to emerge as a strong force allied together in the global passenger vehicle industry, through their strategic partnership. Present on the occasion were Mr. Bharat Doshi, Executive director & Group CFO, Mahindra & Mahindra Ltd. and Dr. Pawan Goenka who is chairperson of Mahindras Automotive and Farm Equipment heavenss. Key officials from the Mahindra Group and SYMC were also present.For Mahindra, the biggest benefit from this partnershipwill be the opportunity to reign synergies between the two companies, while protecting their respective brand identities and ensuring quality. Towards this end, a Synergy Council comprising of senior counselling from both companies will be established to ensure focus and delivery of synergies between the two companies. The Council will focus on various aspects such as global procuremen t, new car development and business outline to penetrate international markets. Strategic plans such as the India project which involves launching the Rexton and Korando-C in India have already been kicked off. in addition under discussion are opportunities for joint product and technology development and synergy in global operations and purchase. Mahindra has a strong IT agreement that is being reviewed for suitability for SsangYong. The company is also considering the possibility of Mahindra Finance ambit up operations in Korea to enhance the sales of SsangYong vehicles. Mahindra has also proposed the following five point agenda for SsangYong * Strengthening the product pipeline.* Harnessing synergies between the two companies.* Investing in the SYMC brand.* Building human resources.* Focusing on financial stability.SsangYong has also proposed the following investments* In 2011, the business plan calls for a 70% investment increase in product development, as compared to last ye ar, at over KRW 200 billion. * Over 40 billion KRW for brand building in Korea a 60% increase over 2010 and an increase in oversea brand investment by over four times, in 2011.Dr. Pawan Goenka, President, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd., mentioned that Mahindra was extremely conscious of SYMCs Korean inheritance and would only want to enhance it. SsangYong will be an independently run Korean company with largely Korean Management and will lodge a Made in Korea Brand. He also announced that the new CEO of SYMC will be Mr. Yoo-il Lee, while Mr. Dilip Sundaram from Mahindra will be the new CFO. He also announced the names of the new Board of Directors of SsangYong Motor Company. This is a landmark day for all of us at Mahindraas it marks the beginning of what I am sure will be an enduring partnership with SsangYong Motor Company.I would like to thank all the employees of SsangYong as well as the companys creditors for the help and cooperation extend ed to us during this long process. As one of the countrys postmortem automotive companies, SsangYong brings with it a rich legacy of R&D and innovation. This legacy, conjugate with the synergies between the two companies in the areas of R&D, product development and platform sharing, will make the feature entity of Mahindra and SsangYong a force to reckon with in the global utility vehicle space.They are committed to nurturing the SsangYong brand in both the Korean and global markets and returning it to its days of glory, said Dr. Pawan Goenka. Mahindra brings with it a great deal of passion, domain expertise and knowledge of the global UV market, as Indias leading utility vehicle (UV) manufacturer. All of us at SsangYong look forward to working closely with the Mahindra team to help develop a new product portfolio and gain momentum in overseas markets, said Mr. Yoo-il Lee, CEO, SsangYong Motor Company. 5.2 REVA Electric Car Co Ltd.Mahindra enters high growth electric car segment acquires majority stake in REVA REVA was established in Bangalore in 1994 as a joint venture between the Maini Group of Bangalore, India and AEV LLC of California, US. Its REVA electric vehicle was first commercially for sale in Bangalore in 2001 and in London in 2004, under the G-Wiz brand. REVA is a technology innovator with the largest deployed fleet of electric cars in the global market today, available in 24 countries across Europe, Asia and Central and South the States with more than 3,500 of its vehicles on the road and the accumulated data from more than 100 million km of user experience. Mahindra & Mahindra Ltd. Today strengthened its position in the Electric Vehicles domain with the acquisition of a majority stake in REVA Electric Car Co Ltd., Bangalore.REVA Electric Car Co Ltd. will be renamed Mahindra REVA Electric Vehicle Co Ltd. Under the new agreement which was signed today by both the companies, M&M will own 55.2% integrity in Mahindra REVA by a combination of equ ity purchase from the promoters and a fresh equity infusion of over Rs 45 crores (approx US $10 million) into the company. The buyout makes the Mahindra group a strong global player in the electric vehicle space.Postthe buyout, the Board of Mahindra REVA has been re-constituted under the chairmanship of Dr Pawan Goenka, President Automotive & Farm Equipment Sectors, Mahindra & Mahindra. The new board includes five nominees from Mahindra & Mahindra, two from the Maini family, and one from AEV LLC, California (co-founders of REVA). An independent director will be added to the board subsequently. Mr. Chetan Maini will continue to play a leading role in Mahindra REVA as Chief of Technology & Strategy and will continue to be on the board. Under its core Sustainable Mobility initiative, Mahindra has been working for the last 10 years on developing green technologies and has demonstrated diesel hybrid technology on the Scorpio and hydrogen Alfa three wheelers. Mahindra has a pilot fleet r un with 100% bio-diesel and was the first to launch micro-hybrid technology in India with around 50,000 such micro-hybrids on the road today.In EVs, over and in a higher place the electric three-wheeler Bijlee developed in 1999, it is also currently working on an electric version of its mini-truck, Maxximo. Mahindra REVAs EV technology will be adapted for these and other M&M vehicles. Access to strong EV technology will strengthen Mahindras other current sustainability initiatives. REVA is currently marketing its products in 24 countries across the world with an overall vehicle population of over 3500, arguably the largest EV fleet globally. REVA recently premiered its next generation electric car models, the NXR and NXG which received an enthusiastic response. Mahindra REVA will now have introduction to Mahindras vehicle development technology and distribution network, significantly enhancing its ability to launch a state-of-the-art electric vehicle for global markets. public sp eaking on the acquisition, Mr Anand Mahindra, VC&MD, Mahindra & Mahindra said, With issues such as climate change and carbon footprint taking centre stage globally, eco-friendly transportation becomes the need of the hour.Mahindra already has an established sustainable mobility solutions programme and our association with REVA will only help us further expand our green footprint both in India and overseas. Dr Pawan Goenka, President (Automotive & Farm Equipment Sectors), Mahindra & Mahindra and the newly elected Chairman of Mahindra REVA said, This is a key strategic acquisition for Mahindra in its march towards sustainable mobility. Mahindra and REVA bring together complementary strengths. WithMahindras vehicle engineering expertise, global distribution network, sourcing poking and financing support, REVAs vehicles have the potential to significantly gain in market penetration. Mahindra will also benefit from REVAs EV technology for its own products.Mr Chetan Maini, Chief of Techn ology & Strategy, of the newly formed Mahindra REVA mentioned, The EV market is poised to grow significantly and they concluded that in order to grab the opportunity they needed the resources and experience of a major automotive manufacturer. In Mahindra they have found a company that not only shares our vision of principled and sustainable growth but one that also has a reputation for good corporate governance. As a result of Mahindras investment, Mahindra REVA will be able to scale, innovate and accelerate and so to deliver better products to more customers in more places.5. GROWTH STRATEGYMahindra & Mahindra Ltd (M&M) is the flagship brand of the $12.5 billion Mahindra Group, which operates with a portfolio comprising a wide spectrum of vehicles from two wheelers to heavy trucks, SUVs to trail buses. M&M over the years has strengthened its position as one of the countrys premier utility vehicle (UV) and farm Equipment manufacturer with market share of over 50% in UV and 40% in tractors, respectively. It has recently entered 3-wheelers and CV segment. M&M is targeting sale of about 550,000 tractors in FY12E.6.1 Investors RationaleDuring Q2FY12 net sales of M&M surged by 37.6% to 73,068 million from the 53,113 million in the year-ago quarter, control by 35.9% and 35.5% growth in its automotive and farm equipment segment, respectively. Though direct margins for the current fiscal are probable to stay under pressure under tight liquidity and rising input cost scenario, they expect the revenues of M&M to reach 300-320 billion in the climax two year.At a time, when sequent rate hikes, high inflationary data, strikes andcostlier fuel prices have crippled the Indian auto sales manufacturers, M&M has emerged as the only automotive player to have beaten the deceleration comprehensively with a growth of 21% in 2011. Considering M&Ms aggressive growth strategies to expand its global footprint with a range of new variants in the four-wheeler segment, they expect M &M to mark 11-14% rise in its FY12E sales realization.M&M complement the tag of no. 1 tractor manufacturer in the world in terms of volumes, occupying more than 40% of the domestic tractor market. With tractor demand slightly stable despite ongoing economical slowdown, the company is targeting sale of about 550,000 tractors next year. Beside, with the industry providing sufficient headroom for growth, they expect sales from the farm equipment segment of M&M to grow 17-18% by the end of FY12. M&M acquisition of SYMC Motors (SYMC) gives the UV product line of the company an extension into the premium SUV segment with an established foothold in the markets of South America, Russia etc. The management expects 50% volume growth at 113,000-114,000 units for SYMC in CY11 and aims to sell 160,000 units by 2013 and 300,000 units by 2015-16 from the unit.6.2 High volume in tractor segment drives Q2FY12 revenueDuring Q2FY12, M&M net sales surged by 37.6% to 73,068 million from the 53,113 mi llion in the year-ago quarter, driven by 35.9% and 35.5% growth in its automotive and farm equipment segment revenue, respectively. Besides, the operating expenditure of the company increased by 43% to 64,866 million principally due to the increase in raw material cost and employee expenses by 33% and 20% respectively. The strong volume growth across the vehicle and tractors segment despite of a difficult market situation and a tight control on expenses has helped lift the EBITDA by 6.3% to 8,202 million from 7,719 million in the corresponding quarter last year. Further, owing to the sharp rise in the interest and depreciation charges, the net profit margin (NPM) dropped by 375bps to 9.7%.M&Ms standalone net profit at 7,374 million declined 2.8% from 7,585 million in the corresponding period preceding year, due to a foreign exchange loss. The company has suffered a foreign exchange net loss of 320 million, as the rupee fell 8.8% against the dollarin the July-September quarter. fre eing further, they expect the revenues of M&M to reach 321 billion in the coming two year, making a contribution of 950-980 basis points to its present EBITDA margins.6.3 naughty November sales volume, higher realizations to drive performance in FY12EM&Ms November total sales volume in the automotive segment reported a robust growth of 53% (y-o-y) at 40,722 units, with a significant contribution of 38,159 units from the domestic terrain. A high volume growth of 46% in the passenger Utility Vehicles (UVs) segment led the domestic four-wheeler sales while sales volume in the three wheeler segment grew 32% during the month. M&Ms UV and three wheeler export during the month also grew 71% at 2,563 units against 1,500 units a year ago.Meanwhile, M&Ms Farm Equipment Sector division reported a 3% fall in tractor sales to 17,527 units in November with domestic sales falling 5% to 16,175 units backed by issues related to the credit flow to the domestic farm sector. The companys tractor expor t increased 33% to 1,352 units during the month against 1018 units sold to overseas market in the same period prior year.At a time, when consecutive rate hikes, high inflationary data, strikes and costlier fuel prices have badly hampered the Indian auto sales numbers game M&M has emerged as the only automotive company to have beaten the slowdown comprehensively with a growth of 21% in 2011. Backed by significant demand for M&Ms premium sports utility vehicle, XUV500, the company is acutely working to double its production to clear its order backlog of 9,500 units by January 2012. Considering, M&Ms ability to outperform the industry numbers despite strong economic headwinds and its proposed variants in both two-wheeler and four wheeler segment, they expect M&M to mark 11-14% rise in its FY12E sales realization.6.4 Increased focus in the tractor segment to drive M&M growth in FY13M&M complement the tag of no. 1 tractor manufacturer in the world in terms of volumes back up by 1,300 dealers with over 2,200 service points, 7 tractor plants and 1 foundry. The tractor segment has been fairly stable during the ongoing economical slowdown and has registered a growth of 20% in the current fiscal. M&M with more than 40% share in the tractor industry of the country has gone a long way in keeping pace with the industry growth.The company is targeting sale of about 550,000 tractors next year. Market share movements have been slower with a 0.5% to 1% change in a year. However, it was successful in penetrating newer villages that accounted 10,000 units in such markets. Growing focus in the tractor division will also provide further assistance to M&M as slowdown in rural consumption has not been experienced yet. Besides, the strong second-stringer demand will be a key support in the near term as it accounts for 40% of sales.Indias tractor industry is well poised to register 10-12% growth in FY13 and with labor shortage driving the farm mechanization the industry is likely to register a 20% growth in the coming three years. With the industry providing sufficient headroom for growth, they expect sales from the farm equipment segment of M&M to grow 17-18% by the end of FY12.6.5 Macro factors- to drive the expected demand for farm equipment The quantum of tractors bought using cash payments has increased to 20-25% of sales in India, compared with 10% earlier, which reflects airiness in rural incomes. About 40% of the current tractor demand is from the replacement market. Though there is some concern about rural economy and consumption is slowing down, M&M has not seen any slowdown in rural consumption. Shortage in farm labour has also acted as a key catalyst for tractor demand. Tractors are no longer a luxury for the rich farmers, but a tool for better cost management.6.6 New launches, foray into new segments to augment future growthIn FY11, M&M registered domestic volumes growth of 24% led by new product launches and strong performance from existing p roduct ranges. It launchedGio, Xylo, Thar, Maximmo, Yuvraj, Genio and Arjun MAT, during the year which is likely to power the companys growth in future. Besides, M&M has also lined-up new launches, which would help bring spare volumes. It is ready to enter the market with a new SUV, 4-seater electric car, re-launch of Stallio motorcycle, two new versions of Verito, one SUV with SsangYong in India, aerospace components and mine protected vehicle (MPV-I).M&Ms recently launched XUV500 SUV received remarkable response from the domestic consumers. Priced at 10.8 lakhs, the company has rightly positioned XUV500 in the market for people who desires something above 7 lakhs and below 15-20 lakhs. As a result, M&Ms the XUV500 has gone a long way to set a involution record of 8,000 units in just 10 days of being launched in 5 cities of the country.6.7 SYMC to add value in premium UVsAcquisition of SYMC Motors (SYMC) gives the UV product line of the company an extension into the premium SUV s egment. SYMC has a distribution network of over 130 dealers in Korea and 1,200 dealers in more than 90 countries. The acquisition gives M&M access to SYMCs popular product portfolio with an established foothold in the markets of South America, Russia, Eastern and Western Europe, and Africa which bodes well for M&Ms plans to launch a global SUV this year. The management has guided 50% volume growth at 113,000-114,000 units for SYMC in CY11, with the recent launch of Korando-C. Thus, the acquisition of Korean company SYMC augurs well for M&M in the long term, placing it on a new growth trajectory.As debt woes continue to plague one of its largest markets Europe SYMC is eyeing to enter emerging markets including India, China and Russia playing a bigger role in a bid to boost volumes in 2012 with a year-on-year volume growth of 40%. The company aims to sell 160,000 units by 2013 and 300,000 units by 2015-16.M&M-SYMC have finalised a combined future product portfolio strategy, which will see 3 new platforms and 4 new products coming in from both partners. The new sourcing strategy for M&M-SYMC is being put intoplace, which will see both companies sourcing an enormous $20 billion of components over the next 5 years. This huge sourcing is expected to bring in economies of scale and reduce the cost for the duo.6.8 Strategic growth plan for Mahindra Navistar to drive M&M future growthMahindra Navistar Automotives Limited (MNAL), which is a 5149 joint venture between M&M and Navistar Inc., is planning to launch at least two new modelsa 49-tonne tractor trailer and a 25-tonne tipper for the mining sector in H2FY12E. Intending to establish a pan India presence, the company further intends to increase its current 48 dealership across various cities to around 100 by adding 50 new dealers by the end of FY13E. With a targeted growth of 9% in the second half of FY12E, the company is planning to see cash break-even in the next 12 months. Further, the company is planning to inve st around 2.50 billion to add few more variants in the heavy-duty goods commercial vehicles segment, which in turn will help the company ramp up volumes and use its factory capacity fully in the next three years.6.9 M&M eyes to enter larger South Asian marketThe largest utility vehicle maker of the country is planning to set up an assembly plant in Southeast Asia in the next few years as a part of its strategy to expand its global presence through its entry to markets in Thailand and Indonesia. Currently, M&M exports vehicles to Malaysia and is aiming to expand to other markets in ASEAN region. Over the next four to five years, M&M sees at least 15-20% of its total export volumes coming from this region. In FY11, M&M exported 17,000 units of utility vehicles and pick-ups and around 11,000 tractors. The company is aiming to double overseas revenues to more than $1 billion by 2013 and is aiming two-fold increase in volumes to 100,000 units.6.10 M&M to launch its first compact Car in 2 012M&M is eyeing to launch its first compact car after it acquired RevaElectric Car Company in 2001. The SUV-maker is aggressively working to launch its first compact car in the country Reva NXR by 2012. With a milage of about 9.6 km for every 3 spent, the Reva NXR, ensures cardinal times the gas mileage generated by the countrys most fuel-efficient flatulence-powered car. At a time, when petrol prices are breaking new highs M&M expects its Reva NXR to seek significant attention from the consumers who spend 7,000-8,000 every month on petrol.Beside, M&M is also establishing one of worlds biggest manufacturing bases for electric cars of 30,000 units per annum near Bangalore, which is likely to commence production in FY13. With increased demand for electric cars, M&M apart from its marketing strategy to sell its Reva NXR through an expand network of 100 outlets in India, the company is also mulling over rolling its new electric car model in countries like Norway, which houses the h ighest consumer market for electric cars in the world.After M&M lead development in the electric car market of India, many other car makers are also developing concept vehicles to cater to the emerging demand for Electric vehicles in India in the years to come. Polaris India, a major multi terrain vehicle manufacturing company is planning to introduce electric cars to Indian market. Considering the rising fuel prices, the impact on power and utilities companies of the electric vehicle market is likely to attain consumer attention in medium to long term.6. closedown AND RECOMMENDATIONSThe part of Indian automotive industry in Mahindra & Mahindra Ltd comprises of a number of Indian-origin and multinational players with varying degree of presence in different segments. Today, nine of the top ten global automotive manufacturers have a presence in India which clearly points to its importance as a strategic market. Similarly, the domestic tractor market also has a mix of Indian-origin an d international manufacturers and is segmented by horsepower. While the automotive segment is doing well and has already clocked an average volume growth of 28% in April and May 2012, it may face problems in the form of policy decisions. The proposal to impose a higher walk out duty on diesel cars/SUVs, which is yet to be implemented, is like a Damocles sword hanging over the company.The differential in diesel pricing, which means charging less for transport trucks and more for diesel cars/SUVs, is another proposal that can make life difficult for Mahindra & Mahindra. Though the company cannot do anything about the monsoon, the management is taking several steps to revive growth in the farm segment and maintain a high growth rate in the automotive segment.With this in mind, Mahindra & Mahindra is set to launch six new products, which will cover both the segments, during 2012-13. Mahindra and Mahindra Ltd, the only manufacturer of electric cars in India, plans to introduce at least five such vehicles in the next three years to take advantage of a government plan to spend Rs. 14,000 crore to boost the popularity of electric and hybrid vehicles in the country. Therefore Mahindra is considered at the top in the automobile sector as of date. The growth strategy adopted by the company will have a colorful future for the company.