CONSUMER CONNECT Anand Mahindra’s days studying film- making  at Harvard gave him an understanding of the American psyche  (Pic by Subhabrata Das)

It was a critical time. M&M was fighting for survival because the government’s 1993 automobile policy had thrown the industry open to foreign competition. M&M knew it had to change but was not sure how.

It was Shyamkumar’s elegant design for a new Sports Utility Vehicle (SUV) — which later became the Scorpio — that woke the company to new possibilities. “A young boy had touched a design nerve… I looked at it (the design) and said this is the company’s future,’’ Mahindra says as he wolfs down a health-freak’s lunch of boiled vegetables. The design moment of the Scorpio was also the defining moment for M&M as a company and brand. It changed the way M&M saw itself in the mirror — overnight. It was a classic case of a product defining a strategy instead of the other way around. The Scorpio inspired M&M to embrace new strategies that would transform the company from a mere tractor and soft-top vehicle maker into a brand-conscious yuppie of the corporate world. Today, the gently greying Mahindra, who once wanted to make films, not automobiles, has proved adept at steering his over Rs 10,000-crore company through this change.

M&M products, such as the Scorpio and its smaller cousin Bolero, are now competing effectively with foreign competition at home. The automotive division, which makes utility vehicles (UVs) and SUVs, now contributes 61 per cent to M&M’s revenues. Of the 288,601 UV/SUVs sold in India in the year up to March 2008, 148,761 or 51.6 per cent were M&M vehicles and 39,935 of these were Scorpios.

(Pic by Sanjay Sakaria)

The Birth Of The Idea
“It’s a gamble,” Lindsay Chappell, Automotive News’ bureau chief in Brentwood, Tennessee says of Mahindra’s plans. “The strongest advantage that Mahindra has, I believe, is that the products that are coming are unlike other products on the road here. The models use four-cylinder diesel engines. There is a growing curiosity here about small-displacement diesels. There are none here.’’

If it’s a gamble, then it’s one whose rules were very meticulously laid out by Mahindra in the mid-1990s. Despite consultants and other advisors telling him to sell off the automotive division and grow the tractor business, Mahindra, who had just taken over running the company from his uncle, the iconic Keshub Mahindra, decided to play the game by his own rules.

Confident that the design skills M&M was developing would marry well with the company’s frugal engineering capabilities, the company’s board invested Rs 600 crore in developing the Scorpio, says Pawan Goenka, who heads M&M’s automotive division. Goenka, a PhD from Cornell, joined M&M in 1993 after a 14-year stint at General Motors’ engine research centre in Michigan.

To reduce costs, Goenka contracted manufacturing to companies that had technology but had never been given the chance to prove it. For instance, South Korean suspension maker Samlip had never designed the full suspension system for a vehicle but M&M entrusted it with that task. Another South Korean company, Wooshin Systems, that had also never done a full body shop design, did the body jigs and fixtures. “It was a very tense decision,” says Goenka. But such moves stood M&M in good stead. Its once-small suppliers have become global players and M&M has found itself possessing a world-class supply chain.