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Articles and blogs on Mahindra "Made in India" Trucks and Cars coming to America:
Business
Week Article: Baseball, Apple Pie...and Mahindra?
How an Indian company plans to woo America's heartland with
its fuel-efficient SUVs and pickups
Engineers
from India design advanced jet engines, write some of the
world's most sophisticated software, and run massive global
computer networks. But can they make a pickup truck that will
sell in America's heartland?
Mahindra
& Mahindra, a conglomerate based in Mumbai, intends to
find out. In spring, 2009, the company plans to launch two-
and four-door pickups and a sport-utility vehicle in the U.S.
This trio of diesel-powered trucks will compete against a
big pack of aggressively promoted offerings from General Motors
(GM), Ford (F), Dodge, Nissan (NSANY), and Toyota (TM). All
of these manufacturers have been warring over a domestic pickup
market that is shrinking and a SUV market that's overcrowded.
Skepticism
abounds. Trucks in the U.S. are sold with imagery of waving
flags, macho companionship, and brawny workers showing off
feats of towing strength to the sound of John Mellencamp anthems.
Buyers tend to be loyal, practical traditionalists.
Considering
that established players such as Toyota, Nissan, and Honda
have already had their share of trouble attracting this crowd,
some experts wonder whether a little-known company from a
country that has no history of selling vehicles to American
consumers has a prayer. They're also skeptical that buyers
will flock to diesel—a technology that many U.S. consumers
associate with belching big rigs. "It looks like an impossible
marketing play," says auto industry consultant Dan Gorrell
of AutoStrategem in Tustin, Calif.
But
at a time of soaring gas prices, Mahindra's vehicles are going
to have one big thing in their favor: superior fuel economy.
Despite diesel's historic brown image, it is emerging as a
green technology. New low-sulfur fuel, federally mandated
in 2006, can produce mileage figures that nearly equal those
of more fashionable hybrids. Mahindra estimates that its compact
SUV, the Scorpio, and pickups, one of which will be called
the Appalachian, will get about 30 miles per gallon in the
city and as much as 37 on the highway. That compares with
30 city/34 highway for the $27,000 Ford Escape SUV hybrid
and 21 city/27 highway for the gas-powered $23,000 Toyota
RAV4.
Although
Mahindra is unknown to most American consumers, the company
has made cars in India for more than 50 years. The $4.5 billion
company also has financial services, information technology,
telecommunications, and agricultural equipment businesses.
Over the past decade, it has sold more than 50,000 tractors
in the U.S.
Well
aware of the image problems confronting an Indian pickup,
Mahindra has conducted extensive consumer research in America.
At a recent meeting at the Alpharetta (Ga.) offices of Global
Vehicles, the company that will distribute the brand in the
U.S., interviews with potential buyers were projected on a
big screen. "I don't see them [Mahindra] entering the
market and immediately competing with more established brands,"
said one thirtysomething male. "Can it really be made
well if it comes from India?" asked another.
Given
these attitudes, the company has made a key strategic decision:
It is not going to waste energy trying to persuade the unpersuadables.
Instead, Mahindra is going to target the three groups it believes
will be the most receptive to its vehicles—consumers
who identify themselves as "green," people who have
bought Mahindra tractors, and the close to 3 million Indian
expatriate households in the U.S. The plan is to generate
buzz with these buyers, then hope the word spreads to the
mainstream.
Rather
than unrolling a big image-building marketing campaign, which
would be drowned out by the thunder of other truck promotions,
Mahindra plans to start small. It will spend only about $20
million on marketing in 2009, less than 10% of what Toyota
spent to launch the Tundra pickup. Almost none of this money
is expected to be devoted to television or glossy print ads.
Instead, it will purchase carefully selected search terms
and banner ads on Web sites popular with its target consumers.
These links will steer potential buyers to detailed information
about Mahindra's trucks. The green consumers whom the company
is courting relentlessly research the products they buy, then
frequently promote them to friends.
Mahindra
has set modest sales targets for its American operation. In
the second six months of 2009, it plans to sell just 18,000
vehicles, followed by 45,000 in 2010. Mahindra will ship its
SUV whole from India, but the pickup trucks will be transported
in pieces. They will be assembled at one of three plant sites
Global is scouting in the Southeast. Worried that any quality
problems could quickly stigmatize the Mahindra brand, Global
Vehicles CEO John A. Perez is working hard with Mahindra to
keep the number of defects to a minimum. "We don't want
to be Kia or Hyundai and have to apologize after we launch,"
says Perez.
So
far, Perez has attracted 263 dealers to distribute Mahindra
trucks. One of them is Steven Taylor, a Cadillac dealer who's
invested more than $1 million in a Mahindra franchise in Toledo
despite all of the obvious risks. "Trucks and an SUV
that get over 30 mpg is a market niche that will get noticed,"
Taylor says.
Mahindra
& Mahindra is 63 years old and entered the car business
in 1949 by building Willys Jeeps in India. Today it's the
leading maker of SUVs in the country. The privately held company
is still controlled by the Mahindra family. In an interview
with Business India, Vice-Chairman Anand G. Mahindra said
of his global truck and SUV strategy: "We want to be
the next Land Rover."
Published
in Business
Week. David Kiley is a senior correspondent in BusinessWeek's
Detroit bureau .
Further
Research on Mahindra in America
Mahindra
USA : Case Study
The Challenge
Mahindra USA, a subsidiary of one of India’s leading business
groups, marked the group’s foray into the US market for the
marketing and distribution of tractors. Bristlecone had implemented
various SAP applications at MUSA and was asked to provide
long term functional and technical support.
The
Solution
Bristlecone proposed a blended onshore-offshore support model
to meet MUSA objectives. Proactive monitoring checks are carried
out daily to preempt any potential system failure leading
to downtime and system enhancements are provided as needed
with rapid response.
The
Result
High quality support with minimum downtime and prompt problem
resolution. Cost effective due to a blended onshore-offshore
model.
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