Entering commuter two-wheeler segment was a mistake, admits Anand Mahindra

Anand Mahindra, the chairman of the homegrown auto group Mahindra & Mahindra, on Wednesday admitted that entering the commuter bike segment more than a decade ago was a failure on the part of the group.

The group entered two-wheelers after buying out Kinetic Motors in July 2008 and relaunched the ‘Freedom’ bikes under the label of ‘Mojo’ but has not been able to make a mark in the vastly entry-model driven two-wheeler space in the country even after a decade. The market is dominated by Hero Motorcorp and Japanese major Honda which together control close to two-thirds of the over 21-million units per annum market.

Of this, Mahindra sold a paltry 4,004 units in FY19, down 73 per cent from FY18. The only player in an over a dozen OEM market behind Mahindra is Kawasaki Motor which sold 3,115 units in the year, according to Siam data.

In the year to March 2019, according to the Saim data, the domestic two-wheeler domestic market stood at 21.2 million units, up 4.86 per cent from FY18.

Terming failure as “capital”, just like financial and human capital, Mahindra said the learning from the commuter bike episode, which was a “product failure” led to the learning and entry into the premium two-wheeler segment where he claimed the group has been successful.

Mahindra said they entered the two-wheeler market with the confidence to “win”, on the back of having a strong understanding of the ecosystem, distribution, R&D and also brand positioning.

“We knew our dream well and we had the right things, but how to win is where we went wrong. We should have never gone to the commuter bike side,” Mahindra said, speaking at an event organised by British carrier Virgin Atlantic on looking at ‘business as an adventure’.

Sharing the stage with the Virgin group founder Richard Brandson, Mahindra said they brought the premium Java brand to the country a year-ago and seemed to suggest that it has been a success, stating that there continues to be a five-month wait for the cult bikes.

He also said they will soon be launching the BSA bikes, which was acquired earlier.

Meanwhile, amid widespread slowdown in the auto sector, Mahindra claimed that “the most optimistic” people in his group today are those in the auto and farm equipment segments, as they expect sunny days to come back from April.

“...the most optimistic people in our group today are our automotive people. They’ve seen a good close in calendar year and they are hopeful of next year,” he said, adding new emission norms from April will be the biggest demand driver for the company.