Mahindra puts brakes on selling vehicles in Brazil

Homegrown major Mahindra & Mahindra is exiting from the Brazilian market citing unfavourable conditions and lack of opportunity in the mid to long term.
"The current situation in Brazil has made it difficult for us. We see no potential in the mid to long term in the country and therefore we have decided to stop our operations there," Mahindra & Mahindra President and Chief Executive (Automotive) Pravin Shah told PTI.
He, however, said the company would continue to take care of its 4,500-5,000 customers in Brazil through its distributor.
Explaining the reasons for the exit, he said: "There was some ambiguity in policy there, during which we could not sell our vehicles for about two years. When it was cleared, there was requirement for investment and localisation, which were basically entry barriers."

Considering the fact that the Brazilian currency has depreciated by 60 per cent and overall economy in a slowdown mode, it had made the situation difficult, Shah added.
Another reason, he said was that while 95 per cent of the Brazilian auto market is on ethanol blended fuel, M&M was selling mainly its diesel vehicles.
"Brazil was a small market in our portfolio, which we expected to grow but has turned out to be otherwise," he said.
In Latin America M&M sells its vehicles in countries including Chile, Peru and Paraguay.