Battling recessionary trends, the Rs 3,500 crore utility vehicle and tractor major, Mahindra & Mahindra, had branched into transport solutions. And a year down the line, the division -- transport solutions group (TSG) -- claims to have notched up sales of Rs 110 crore.
"We have created a new revenue stream for the company by participating in the full life cycle of a vehicle," said Sanjay Sinha, business head -transport solutions automotive sector.
The TSG covers a wide spectrum of movement of people and goods across urban and rural India. This includes moving consignments from the factory to warehouses and depots to retailers.
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Its client roster includes heavyweight multinationals like Coca-Cola, Nestle, Philips and Procter & Gamble.
Offering a range of solutions, M&M has deployed its utility vehicles along with those of its competitors including Toyota, Tata Engineering and Ashok Leyland.
The move comes at a time, when M&M has seen a dip in its mainline auto sales. According to the financial results declared for the year ended March 31, 2001, net sales and income from operation declined from Rs 3,569 crore in the previous fiscal to Rs 3,538 crore.
In the same period, profit after tax had more than halved to Rs 120.56 crore from Rs 263.48 crore the previous year.
In such a situation, M&M wants to exploit downstream activities like TSG, which not only enhance the Mahindra brand name but also help build long term relationships with existing and prospective customers.
While corporates are the crux of the TSG business, it also caters to milk cooperatives like Mother Dairy and Amul. And in Kolkata, it has sealed a contract to transport fish from the docks to the market.
By being the first auto company to become a transport solution provider, M&M hopes to make the most of the business where profitability ranges anywhere from six to nine per cent.