M&M scripts global strategy

The company has begun to tread the foreign markets in a small way by exporting completely built units (CBU) of the Scorpio and Bolero to the neighbouring countries and a few African states.

The tractor and utility vehicles maker is also in various stages ranging from exploration to final discussion in different markets. M&M will use the CBU import route or assemble from completely knocked down (CKD) kits, depending on what is most suitable in different markets.

M&M is expecting to put its plan into action over the next 6-12 months. It is also scouting for local partners to assemble operations and is open to marketing or technological joint ventures.

M&M also does not rule out a Tata Motors-MG Rover kind of arrangement either. "We will do what is best suited for a certain market. But what we are clear on is that we will not make any investments. There are excess capacities all over the world and it would be unwise to make any investments at this point," said Pravin Shah, vice-president, overseas operations, M&M.

While the company has decided on the CBU import route for the African and Gulf markets, it is looking at assembling vehicles in Iran, Russia, Indonesia and the south and central American markets. In Iran, M&M is talking to PKI, a domestic automobile company for assembling the Scorpio and the Bolero range of vehicles.

M&M has been a supplier of engines and transmissions to PKI for the last 15-17 years for the manufacture of a 4x4 utility vehicle, Sahara. For the south-east Asian markets Mahindra has identified Indonesia as a suitable base and has been studying the market for some time now. It will finalise its strategy in two-three months.

The market that M&M is most excited about is Russia which has demand for 4 lakh units per year market for 4x4 utility vehicles. "It is a tough market to get into but also the biggest in terms of numbers. Russia, including CIS countries, still runs on vehicles that use old technology. We can see Mahindra vehicles creating a lot of excitement there," said Shah.