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7/20/2013 [Type the document subtitle] | Monu MAHINDRA & MAHINDRA COMPLETE STUDY ON AUTOMOBILE SECTOR

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M&M complete analysis done in the year 2013, from july 2013-october 2013 with the help of our respective college staff. Special thanks to the Dean Prof. Bhattacharjee & visiting faculty prof. Abhay Srivastava.

Transcript of Complete analysis of Mahindra & Mahindra

7/20/2013

[Type the document subtitle] | Monu

MAHINDRA

&

MAHINDRA

COMPLETE STUDY ON AUTOMOBILE SECTOR

1

A PROJECT REPORT

ON

MAHINDRA AND MAHINDRA COMPLETE STUDY ON AUTOMOBILE

SECTOR

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BONAFIDE CERTIFICATE

Certified that this project report titled Mahindra and Mahindra complete study

of Automobile Sector is the bonafide work of MR. Monu. A. Tiwari, who carried

out the project under Prof. Abhay Srivastav’s supervision. Certified further, that to

the best of my knowledge the work reported herein does not form part of any other

project report or dissertation on the basis of which a degree or award was conferred

on an earlier occasion on this or any other candidate.

Prof. Abhay Srivastava Prof.C. Bhattacharjee

Fazlani Altius Business School Dean, Fazlani Altius Business School

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FACULTY GUIDE CERTIFICATE

Certified that the dissertation title Mahindra and Mahindra complete study of

Automobile Sector is a bonafide work done Mr. Monu A. Tiwari under Prof.

Abhay Srivastava guidance in partial fulfillment of Master of Business

Administration programme at FAZLANI ALTIUS BUSINESS SCHOOL . The

views expressed in this dissertation is only of that of the researcher and the need

not be those of this institute. This project work has been corrected by me on the

basis of rough draft being submitted.

Prof. Abhay Srivastava

Visiting Faculty

FAZLANI ALTIUS BUSINESS SCHOOL

Powai, Mumbai branch

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DECLARATION

I do hereby declare that the dissertation title A STUDY ON Mahindra and

Mahindra complete study of automobile sector is a record of bonafide work

done by me under the supervision of Abhay Srivastava, FAZLANI ALTIUS

BUSINESS SCHOOL, Mumbai 400 072 and submitted in partial fulfilment of the

requirements for the semester-4 doing degree of Master of Business

Administration.

Monu A. Tiwari

SMM/22

Fazlani Altius Business School

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ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible

without the kind support and help of many individuals and organizations. I would

like to extend our sincere thanks to all of them.

I am highly indebted to Fazlani Altius Business School for their guidance and

constant supervision as well as for providing necessary information regarding the

project & also for their support in completing the project.

I would like to express my gratitude towards Prof. Abhay Srivastava for his kind

co-operation and encouragement which help me in completion of this project.

I would like to express my special gratitude and thanks to Prof. Chittaranjan

Bhattacharjee for giving me such attention and time.

My thanks and appreciations also go to my colleague in developing the project and

people who have willingly helped me out with their abilities.

Place:Mumbai

Date:20th july,2013

Monu.A.Tiwari

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INDEX

Sr. no Particulars Page no.

1 Bonafied certificate 2

2 Faculty guide certificate 3

3 Declaration 4

4 Acknowledgement 5

5 Objective of the report 8

6 Executive summary 9-34

7 Vision & Mission 35-36

8 Long term objective 37-49

9 Strategy management process 50-53

10 Corporate social responsibility 54-76

11 Market research 77-78

12 Environment analysis 79-85

13 Quality standards 86

14 Strategy and risk management 87-96

15 PEST analysis 97-100

16 Market environment analysis 101-110

17 Value chain analysis 111-113

18 Product mix 114-143

19 Guarantee & warrantee 144

20 Services analysis 145-148

21 Manufacturing Plant Location 149-157

22 Key People 158-160

23 Business structure 161

24 SWOT analysis 162-163

25 BCG matrix 164-165

26 Sustainable competitive advantages 166-169

27 Directors report 170-175

28 Financial statement 176-195

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29 Automobile industry in and beyond the crisis 196-198

30 Current status of Indian auto industry 199

31 Need for automotive policy 200-205

32 Case study on yuvraj 206-207

33 Conclusion 208-209

34 Webliograpgy 210

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Objectives of the Reports is to know:

� To Study the automobile Company as well as the whole sector.

� To find the opportunities in the emerging Indian market.

� To find out the success of Mahindra and Mahindra.

� To design long term marketing strategy for penetration for Mahindra &

Mahindra.

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EXECUTIVE SUMMARY

DESCRIPTION OF THE COMPANY:-

Mahindra & Mahindra Limited is an Indian multinational automobile manufacturing corporation headquartered in Mumbai, Maharashtra, India. It is one of the largest vehicle manufacturers by production in the Republic of India.

M & M was founded in 1945 by Mahindra brother’s i.e. KC Mahindra and JC Mahindra and Mohd. Ghulam as a steel trading company, we entered automotive manufacturing in 1947 to bring the iconic Willy’s Jeep onto Indian roads. Over the years, we’ve diversified into many new businesses in order to better meet the needs of our customers. They follow a unique business model of creating empowered companies that enjoy the best of entrepreneurial independence and Group-wide synergies. This principle has led our growth into a US $16.2 billion multinational group with more than 155,000 employees in over 100 countries across the globe.

Today, our operations span 18 key industries that form the foundation of every modern economy: aerospace, aftermarket, agribusiness, automotive, components, construction equipment, consulting services, defence, energy, farm equipment, finance and insurance, industrial equipment, information technology, leisure and hospitality, logistics, real estate, retail, and two wheelers.

Our federated structure enables each business to chart its own future and simultaneously leverage synergies across the entire Group’s competencies. In this way, the diversity of our expertise allows us to bring our customers the best in many fields.

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Founders:-

JAGDISH Chandra Mahindra

KAILASH CHANDRA MAHINDRA

MALIK GHULAM MOHAMMED

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KESHUB MAHINDRA (FORMER CHAIRMAN)

Keshub Mahindra is a graduate from Wharton, University of Pennsylvania, USA.

He joined the company in 1947 and became the chairman in 1963.

During his long career he has held many key positions, served on the Board of

Directors of several organizations, and been a member of many organizations and

committees. He has also held many other important positions, such as Chairman of

Bombay Chamber of Commerce and Industry (1966–67), President of

ASSOCHAM (1969–70), Chairman of the Indian Institute of Management,

Ahmedabad (1975–85); Member of the Foundation Board - International

Management Institute, Geneva (1984–89); Chairman, India Nominating Committee

'Single Nation Programme', Eisenhower Exchange Fellowships, USA (1998–2005).

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ANAND MAHINDRA (CHAIRMAN & M.D.)

Anand Mahindra is Vice Chairman and Managing Director of Mahindra &

Mahindra. He graduated magna cum laude from Harvard University and earned his

MBA from Harvard Business School in 1981. He joined the Mahindra Group in

1981 as an Executive Assistant to the Finance Director of the Mahindra Ugine

Steel Company. His leadership has helped make Mahindra a global company and

strong competitor since India's economic liberalization in 1991. Anand is a notable

public figure with a considerable following on Twitter and serves on many boards

and committees.

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Mahindra and Mahindra Full History:-

1945

- The Company was Incorporated and converted into Public Limited in 1955 at

Mumbai. The Company Manufacture Jeep type vehicles, petrol industrial engines,

industrial process control instruments and flow meters. Trading in steel and

manufacture of professional grade electronic components. Jeeps are manufactured

under a license and an agreement with Willys Motors Inc., Toledo, Ohio, U.S.A.,

for whom the Company also acts as exclusive distributors for the whole of India for

their entire range of vehicles including utility vans, cargo/personnel carriers and

pick-up.

1958

- The Company entered into an agreement with Birfield Ltd., to form Mahindra

Sintered Products Private Limited for the manufacture of a wide range of self-

lubricating bearings.

1968

- The Instrumentation & Electronics Division came into existence as a result of

merger of the wholly-owned subsidiary of Mahindra Engineering Co. Ltd., with the

Company with effect from 1st April 1968. The activities of the merged company

were being carried on in this division.

- The Company acquired the whole paid-up capital of Mahindra Electro-Chemicals

Products Ltd. Company.

- With effect from 1st April, the wholly owned subsidiary Mahindra Engineering

Co. Ltd., was merged with the Company. International Tractor Company of India

Ltd., was merged with the Company effective from 1st November 1977.

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1970

- The name was changed from Mahindra Van Wijk & Visser Ltd. to Mahindra &

Mahindra Ltd. This was merged with the Indian National Diesel Engine Co., Ltd.,

during 1977-78. 1977 - 74,

- 700-9.3% Pref. and 12,98,202 No. of Equity share allotted without payment in

cash to shareholders of International Tractor Co. Ltd., on its merger in prop 1:1

Pref. and 2:3 Equity. 12,500-7.8% Pref. shares redeemed on 1.2.1979.

1978

- The Company started negotiation with Balania K. Zacharopoulos Ltd., Athens for

jointly promoting a new company in Greece for the manufacture of Jeep vehicles

and trucks. Initially, it was proposed to assemble these vehicles mainly from CKD

packs to be shipped from India.

1979

- 57,22,764 Bonus equity share issued in prop. 1:1.

1983

- 76,30,352 Bonus equity shares issued in prop. 2:3 in October 1984.

1984

- Mahindra Spicer Ltd. (MSL), was amalgamated with Mahindra & Mahindra Ltd.

(MML) with effect from 3rd April. Pursuant to the scheme of amalgamation of

MSL with MML, the shareholders of MSL were allotted 1,88,166 equity shares of

MML in the ratio of 1 equity share of MML for every 6 shares held in MSL.

- The Company entered into a collaboration agreement with Foramer S. A., an

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associate of Forasol S.A., for purchase of Ile d' Amsterdam an offshore drilling rig

at a price U.S. $10.75 million. The Company arranged for a foreign currency loan

through Bank of Baroda. In view of this purchase, the Company obtained a firm

order from ONGC for drilling services for 2 years.

1985

- A letter of intent was obtained for the manufacture of 50,000 lines of

EPABX/PAXs in collaboration with OKL Electric Co. of Japan.

- The Company also signed a Memorandum of Understanding with the British

Telecom p.l.c. of London under which the two companies were to jointly explore

and develop opportunities in telecommunication and technical fields in India. -

MBT was made a subsidiary of the Company with 60% holding and the remaining

40% was subscribed by the foreign partners, the British Telecommunications p.l.c.,

U.K. (BT) for provision of software engineers of MBT to work on various projects

of BT in the U.K. MBT also decided to issue equity capital to the extent of Rs 4

crores out of which shares worth Rs 2.40 crores were to be offered to Mahindra &

Mahindra Ltd., for subscription and the balance shares worth Rs 1.60 crores were

to be offered to BT.

1987

- (17 months), approval from Government was received for the manufacture of

Peugeot 504 pick-up vehicles in collaboration with Automobiles Peugeot of

France. - A new model M-595 tractor in the 50 H.P. range was introduced.

1988

- The Company acquired a off-shore drilling rig "Ile d' Amsterdam" from Foramer

S. A., France as on 1st March. A firm letter of intent was received for one land rig

for drilling operations at Jwalamukhi, Himachal Pradesh against a tender from

ONGC. The Company already entered into an agreement with Forasol S.A., for

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purchase of a land rig and related equipment. 1989

- During the year improved versions of CJ 500 range of jeeps and FJ range of

LCVs were introduced. Also a sporty model of jeep was introduce which was well

received by the target audience.

- During September, the Company acquired the automotive pressing unit at Kanhe

from Guest Keen Williams, Ltd. for a gross consideration of Rs 28.75 crores. The

unit has an installed capacity of 10,000 tonnes per annum.

1990

- The Automotive division faced adverse market conditions resulting in a drastic

reduction in production and sales of vehicles. The Automotive division introduced

a direct injection diesel engine, the MDI 2500 A engine on the CJ 500 vehicles. A

new fuel efficient 10 seater vehi cle having a direct injection diesel engine was

introduced.

- A letter of intent was obtained from ONGC for extension of the contract for a

further period of one year. However, on account of certain procedural delays

ONGC dehired the rig and it remained non-operational for about 160 days.

However, the Company received a contract from ONGC for a much higher day rate

and the rig was rendering service to ONGC with effect from 9th November.

- The Company issued 48,16,012-12.5% fully convertible debentures of Rs 110

each with a provision to apply, instead, for 58,86,236 fully convertible zero interest

bonds of Rs 90 each. An option was given to apply for a combination of debentures

and bonds subject to an aggregate value of Rs 52,97,61,320. These

debentures/bonds were offered on rights basis to the then existing equity

shareholders in the ratio of one debenture for every four equity shares held. The

issue was fullysubscribed. Additional bonds/debentures were issued to retain the

over-subscription to the extent of 15% of the issue which is equivalent to 7,22,401

debentures of Rs 110 each.

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- Through another letter of offer, two blocks consisting of 8,64,049 debentures each

were offered to Mahindra Companies and International Finance Corporation,

Washington, respectively with an option to apply for bonds subject to the aggregate

value of Rs 9,50,45,390 for each block. The issue was fully subscribed. Additional

bonds/debentures were issued to retain the over-subscription to the extent of 15%

of the issue which is equivalent to 1,29,607 debentures of Rs 110 each for each

block.

- The employees (including Indian working directors)/workers of the Company

were also offered on an equitable basis 2,40,801 debentures of Rs 110 each with a

provision to apply for bonds within the aggregate limit of the issue. The issue was

under subscribed. Only 16,750 debentures and 68,250 bonds were allotted. The

balance debentures/bonds were allowed to lapse.

- As on 1st April, 49,90,354 debentures and 26,20,371 bonds were allotted.

- As on 1st May, the Company allotted on private placement basis 14% redeemable

non-convertible debentures for a total value of Rs 20 crores to UTI, LIC, ICICI,

Army Group Insurance Fund and GIC and its subsidiaries. These debentures are

redeemable in full at a premium of 5% on 1st May 1997.

1991

- New replacement kits for the series of diesel engines, the XDP 4.90 were

successfully launched in order to replace petrol engines in passenger cars and

create new demands for the series of diesel engines manufactured by the Company.

- During the second half of the year, the Company introduced the new range of

`Commander' vehicles which were well received in the market. A new model on

the anvil was a five door ten seater vehicle "Armada" with a factory built body for

which dies were imported from Japan.

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- To meet the changing needs of the market, the Company introduced a new model

225 DI (25HP) tractor.

- Another 8,64,049 zero interest fully convertible bonds of Rs 90 each for a total

value of 9,50,45,390 were allotted to Peugeot India Holding, France, a subsidiary

of Automobiles Peugeot, France as on 18th January.

- As per the terms of the issue, a portion of Rs 55 of each debenture was converted

into one equity share of Rs 10 at a premium of Rs 45 per share and a portion of Rs

45 each bond was converted into one equity share of Rs 10 at a premium of Rs 35

per share an on 1st April.

- Accordingly, the Company allotted 49,90,354 equity shares on conversion of

debentures and 34,84,420 equity shares on conversion of bonds. The balance

amount of each bond and debenture was to be converted as per the same terms

given above at the end of 18 months from the date of allotment.

- In order to meet the long term working capital requirements, the Company issued

in January 1991, 14% redeemable non-convertible debentures aggregating Rs 25

crores to Infrastructure Leasing and Financial Services, Ltd. on a private placement

basis. The debenture are redeemable in full at premium of 5% on 8th January,

1998.

1992

- It was proposed to launch a new LCV with a much larger platform, imported

driving comfort and better styling .

- The Company issued 72,42,719 - 14.5% secured Non-convertible redeemable

debentures of Rs 100 each with a detachable warrant attached to each debenture

entitling the holder thereof to apply for 1 equity share of Rs 10 each at a premium

of Rs 20 per share in the ratio 1 debenture: 5 equity shares held, on the expiry of

six months and 36 months from the date of allotment of debentures.

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- Another 3,62,136 non-convertible debentures with detachable warrants were also

offered to employees on an equitable basis. Only 2,20,300 debentures taken up.

- 76,04,855 oridinary shares of Rs 10 each at a premium of Rs 20 per share were to

be issued to those exercising the rights attached to the warrants between 6 months

and 36 months from the date of allotment of debentures. The debentures were to be

redeemed not earlier than the end of 7th year but not later than the end of the 10th

year from the date of allotment of debentures.

1993

- The Automotive division undertook to introduce a wide range of products such as

mini bus, MM Deluxe, Armada deluxe, Cabking pick-up, CL-Classic & a

single/double Cab pick-up etc.

- Mahindra Nissan Allwyn Ltd. (MNL) was amalgamated with Mahindra &

Mahindra Ltd. (MML) with effect from 1st November. Pursuant to the scheme of

amalgamation, the shareholders of MNAL were allotted 9,73,200 equity shares of

MML in the ratio of 1 equity share of MML for every 25 shares held in MNAL.

With the merger modern automotive plant owned MNAL became a Unit of the

Company's automotive division.

- The Company issued 100,47,043 Global depository receipts valued at US $ 74.75

million. Each GDR was issued at a market price of US $7.44 and was supported by

equal number of underlying shares. Accordingly 1,00,47,043 shares were allotted at

a premium of Rs 22.50 per share.

1994

- During the year a new Company Mahindra USA Inc. had been established in

Texas, U.S.A. with the objective of increasing tractor sales in U.S.

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- 9,73,200 shares allotted to the erstwhile sharehodlers of MNAL 11,14,682 shares

allotted against the detachable warrants. 35,85,874 shares allotted to Ford Motor

Company USA, at a premium of Rs 370 per shares. 28,00,000 shares allotted to the

promoter group.

1995

- A New LCV model-cabking DI 3150 - with a payload of 2.5 tonnes, a 5-speed

transmission and high quality components was launched. Also, a sporty 4-wheel

drive vehicle Mahindra Classic with modern fitments such as Vacuum assisted

brakes, disc brakes in front, wire wheels & bull bar was launched for the domestic

market. In addition, a new commander 5-Door Hard Top vehicle, primarily targeted

for semi-urban and rural transportation was introduced.

- Two new models - 365 DI and 585 - DI were also launched in 30-35 HP and 45-

50 HP segments respectively.

- The Company entered into a joint venture agreement with Ford Motor Company

USA (Ford) for promotion of a new Company for the manufacture and marketing

of Ford range of passenger and other vehicles. The Company has an equity

participation of Rs 160 crores each by Ford and the Company.

- 22,71,322 No. of Equity shares allotted in conversion of warrants. 407,17,489

bonus equity shares issued in proportion 2:3.

- The tractor division received the ISO 9001 certification from TUV of Germany.

1996

- The Company proposed to introduce the `Armada Grand' with XD3 diesel engine,

5 speed BA 10 transmission with air-conditioning and power steering as standard

features. New models like, soft top and FRP versions of CL/MM 550 models,

comfortable 8 seater Armada with Disc Brakes and an optional factory fitted air

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conditioner, Commander 650 DI on a longer wheel base and MM 540/550 XDB

models with the powerful 2.5 lines XD3 engine and the all-synchromesh 5 speed

BA 10 transmission were launched during the year.

- During July, the Company offered US $100,00,000-5% convertible note during

July 9, 2001 came into GDRs each representing one share at a cover sum price of

US $11.955 per GDR. Till date 15,73,830 shares issued.

1997

- The Zaheerabad plant and R&D division were awarded Iso 9002 and ISO 9001

certification respectively. With the technology received from Fuji Technica, Japan

the company undertook to manufacture dies for vehicle bodies in the new Die

Shop. During the year, 7 new models to cater to different nice markets were

introduced.

- New products viz. 275 DI TU upgrades B-275 model with increased power and

585-C, 585 DI model with constant mesh transmission for ease operation were

introduced.

- M&M is setting up an engineering and product development centre at Thane to

strengthen its technology and designing capacities.

- M&M is setting up a joint venture with Mondragon Corporation of Spain in the

area of iron foundry. The joint venture agreement was signed in Spain by M-M at

an Indo-Spain joint business council meeting organised by the Federation of Indian

Chambers of Commerce and Industry and the Association of Chambers of

Commerce and Industry of India.

- M&M is entering into a 50:50 joint venture with the $8 billion Case of the US for

manufacturing high horse power tractors.

- The M&M-Sealand joint venture is considering introducing a Ro-Ro (Roll-on,

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Roll-off) railway service in India. - The Mahindra group has tied up with Sega

Enterprises Ltd and Mitsubishi Corporation of Japan to form a joint venture (JV) in

India to develop and launch Sega branded family entertainment centres.

- M&M has signed an agreement with Chemoleums Ltd under which M&M will

use a special quality of Chemoleums lubricating oil, Mahindra Singlestar, for its

tractors.

- M&M has signed a wage agreement with its union at its automotive plant at

Kandivali, evolving a Mahindra Production System (MPS) which is an

amalgamation of latest work measurement techniques and Toyota Production

Systems.

1998

- A joint venture company is being promoted by Mahindra and Mahindra Limited,

Infrastructure Leasing and Financial Services and Tamil Nadu Industrial

Development Corporation to set up an industrial park near Chennai to attract auto

ancillary units and all categories of non-polluting industries.

- Utility vehicle manufacturer, Mahindra and Mahindra (M&M) on May 27 signed

a productivity and capacity linked wage agreement with its union (Bharatiya

Kamghar Sena) at its tractor plant at Kandivali.

- M&M has signed new productivity agreements with its workers at the Kandivli

(Mumbai), Nashik and Zaheerabad (Andhra Pradesh) plants.

- Mahindra Ford is likely to sign a MoU with the government to import auto kits.

- Mercedes-Benz India Ltd and Mahindra Ford India Ltd have signed a MoU with

the Directorate-General of Foreign Trade (DGFT), under the new MoU policy for

car manufacturing in the country.

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- Danish company Maersk, Mahindra & Mahindra and the Tamil Nadu Industrial

Development Corporation (Tidco) propose to establish a joint venture to develop

Colachel on western coast of south Tamil Nadu into a hub port.

- Mahindra & Mahindra (M&M) is all set to float a 50:50 joint venture company

with the Punjab state government for setting up a hi-tech agro-commodity

exchange in the state.

1999

- M&M has set up a new company - Mahindra Auto Specialities Ltd - for bullet-

proofing passenger vehicles and providing specialised services. M&M has signed

an MoU with Plasan Sasa of Israel for design and development of armoured (bullet

proof) solutions on M&M utility vehicles for use by Indian security forces.

- The Mahindra & Mahindra group and the TVS group have floated a joint venture

to provide software solutions to the automobile sector.

- Mahindra and Mahindra (M&M) is working towards introducing a slew of models

in India from the Mitsubishi stables, including its famed Pajero brand of multi-

utility vehicles (MUVs) and jeeps.

- Mahindra & Mahindra Ltd (M&M) has created a tier-IT structure under Mahindra

Holdings & Financial Ltd whereby individual subsidiaries will tap the capital

market depending upon their need for cash.

- Utility vehicle major, Mahindra and Mahindra (M&M), is entering the Rs 1,000-

crore three-wheeler market for the first time. The company will launch its first

three-wheeler a diesel-driven eight seater within 8-10 months from now.

2000

- The Company will be launching its first CNG-powered utility vehicle in Delhi.

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- The Company consequent to disciplinary action taken by the Management against

certain workmen and Union representative, the workmen of Kandivli Plant of

Tractor Division of the company initially stopped work and thereafter resorted to

illegal strike on 11th January.

- The Company proposes to make a call for redeeming Bonds of value US $25.378

million out of current outstanding of US $27.866 million.

- The Company tie-up with Citibank for a channel financing agreement for their

dealers.

- Mahindra & Mahindra launched its eight seater Marshal DI Deluxe 2000 in

Western Maharashtra.

- Mahindra Auto Specialisites Ltd, a wholly-owned subsidiary of the company

delivery of the first "Neticle" (net-vehicle) - brand named Quadro - in India.

- The Company has launched its new generation tractors Arjun 605 DI at the

Kandivali plant.

- The Company and French car maker Renault have signed an agreement to explore

the possibility of using Renault petrol engines for M&M's planned Scorpio utility

vehicle.

- The Company has launched a fresh voluntary scheme for employees in its tractor

division. The Scheme will open on June 8 and will continue till July 31.

- The Company is set to launch its 2.5-litre multi-utility vehicle, Bolero.

- The Company launched the 39 HP and 40 HP models of its `Bhoomi Putra' range

of tractors.

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- The Company has entered into a technical alliance with Austrian engine

manufacturer AVL list GmbH for production of light commercial vehicles of 3.5

tonne capacity.

- M&M will launch the LCV under the `Loadking' name in January next year.

- M&M has launched its first 60 HP class tractor Arjun 605 DI here, will from now

roll out a new mode very six months.

- The Company the utility vehicle market leader, launch of its latest UV, the Bolero

GLX.

- The Company will launch Scorpio, its urban utility vehicle, by the end of the year.

- The Company has launched the first of its new series of "Horizin Tractors", the

Mahindra "Arjun 605 DI" in Andhra Pradesh.

- The Company launched diesel version of Bolero in a short time.

- Mahindra & Mahindra is to go for a expansion, keeping pace with its plans for the

introduction of new models, including the Scorpio.

- Mahindra & Mahindra is likely to introduce agricultural related implement and

equipment in the near fugure.

- Mahindra and Mahindra Limited (M&M) launched yet another range of new

generation tractors to grab a large share of an emerging mature market.

- The Company has launched its fourth portal business with an investment of $1

million.

- Mahindra Intertrade, subsidiary of Mahindra & Mahindra, has launched a steel

trading portal, steelmartindia.com.

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- Fitch Ratings India has assigned `Ind AAA' rating to the proposed five-year Rs

100-crore non-convertible debenture programme of the company.

- The Board has approved an ESOS and decided to allot 55,24,219 No. of equity

shares to the Mahindra & Mahindra Employee Stock Option Trust.

2001

- The Company has set up a farm extension services division called Mahindra

Shubh Labh, which will pioneer the building of a chain of one-stop shops offering

a comprehensive range of farm-gate services.

- Mahindra Intertrade, the largest non-automotive company of the Mahindra &

Mahindra group, has entered into a distribution alliance with Lego.

- Mr. Anand G. Mahindra has been appointed as Vice-Chairman and Managing

Director.

- Mahindra & Mahindra is set to launch three new variants of its utility vehicle

Bolero to boost its presence in the urban segment.

- The strike at the company's Nashik automotive plant which began on March 4,

has been called off with effect from 8th March.

- Credit Rating and Information Services of India Ltd. has revised the rating

assigned to the company's long-term debentures to `AA+' to `AAA'.

- Mahindra & Mahindra has tied up with French auto giant Renault for sourcing

petrol engines for its premium utility vehicle Scorpio which would be launched

later this year.

-The price of Mahindra & Mahindra Ltd (M&M) shares hit a 92-month low on the

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Bombay Stock Exchange (BSE) on june 14 fuelled by market apprehensions of a

steep fall in the company’s sales in May 2001

- Mahindra & Mahindra launched the premium version of its 7 seater multi-utility

vehicle, Bolero GLX.

2002

-Mahindra & Mahindra Ltd has informed BSE that ICICI Bank Ltd has withdrawn

the nomination of Mr Inder Chand Jain as their Nominee Director from the Board

of M& M with immediate effect.Consequently Mr Inder Chand Jain ceases to be a

Director of Mahindra & Mahindra Ltd with immediate effect.

-Mahindra & Mahindra Ltd has informed BSE that Mr. David Friedman (currently

the Alternate Director to Mr.Lewis W. K. Booth) has been appointed as a Director

of the Company w.e.f. October 30, 2002 in the vacancy caused by the cessation of

Directorship of Mr. Lewis W.K. Booth. Mr. V.K. Chanana has been appointed as a

Nominee Director of UTI w.e.f. October 30, 2002 in place of Mr. Sanjiv Kapoor

whose nomination has since been withdrawn by UTI.

2003

-Unleashes MaXX Pik Up utility vehicle

- Signed an agreement with Canara Bank . Where in, Canara Bank will provide

loan to those farmers who are willing to buy Mahindra's tractors and other farm

implements.

- Mahindra and Mahindra Ltd on December 24th showcased its new products,

Bolero XL and Bolero XLS, for prospective customers in Karnataka.

2004

28

-Mahindra & Mahindra delisting of shares from DSE

-M&M launches two variants of Bolero utility vehicle in TN

-The former managing director of Rallis India, Mr Rajeev Dubey, is joining

Mahindra & Mahindra Ltd (M&M) as Executive Vice-President (Human

Resources & Corporate Services). Mr Dubey has previously held senior positions at

Tata Steel and was the managing director of Tata Metaliks.

-Auto giant Mahindra and Mahindra has launched its latest variants of Bolero XL

range here on January 19, 2004, thus heralding its launch across the State.

-M&M enters into agreement for acquiring majority stake in US based Bristlecone

Inc

-Mahindra & Mahindra Ltd has informed that the equity shares of the Company

have been delisted from Pune Stock Exchange Ltd w.e.f. January 16, 2004.

-M&M unveils innovation matrix to enhance performance

-Mahindra Special becomes M&M's new IT unit

-Equity shares delisted from Madras Stock Exchange

- Tied up with an Iran-based company Barchinkar for localising M&M tractors in

the Iran market

- Mahindra Tractors in accord with Castrol

-M&M rolls out India's first turbo tractor

-Mahindra & Mahindra Ltd has informed that HSBC Global Investment Fund has

acquired 3,99,825 equity shares of the company through market on May 17

29

-- Andhra Bank has announced that it has joined hands with Mahindra Tractors for

financing the distribution of tractors through the bank branches across the country

-Mahindra & Mahindra (M&M) has forayed into the Latin American markets

through the opening of an assembly line in Uruguay

-Mahindra & Mahindra Ltd (M&M) on announced its foray into the South African

automobile market

-Hemant Luthra to head M&M's new MSAT Sector

-Dena Bank inks MoU with M&M for tractor loans

2005

- Mahindra & Mahindra tractors' top dealer in the US has become the largest tractor

dealer in the US, muscling past dealers of John Deer, New Holland and Kubota.

-M&M forays into Australian tractor market on February 14, 2005.

-Mahindra & Mahindra Ltd (M&M) launches its Common Rail Diesel Engine

(CRDEe) fitted-Scorpio, which conforms to BS III emission norms on February 22,

2005,

-Mahindra & Mahindra executes JV Agreement with Renault

-Scorpio unveiled in Malaysia on May 4, 2005

-M&M, Renault ink MoU to set up Rs 550 crore car manufacturing plant in Nasik

-M&M introduces new pick-up vehicle on July 6, 2005

30

-Mahindra unveils 3-wheeler cargo carrier Champion Alfa model

-Mahindra & Mahindra inks a JV with International Truck & Engine Corporation,

USA

-Mahindra & Mahindra enters into agreement with Plexion Technologies,

Mauritius

-M&M has signed a memorandum of understanding with the Saigal family of

Pakistan for exporting tractors to that country..

-Mahindra & Mahindra has given the Bonus in the Ratio of 1:1

2006

-M&M unleashes Scorpio Pik-Up in South Africa

-M&M unveils three-wheeler car

-M&M Hingna unit enters into new new wage agreement

- Mahindra & Mahindra Ltd on Oct 11,2006 signed a agreement with ITMCo (Iran

Tractor Manufacturing Co) to sell tractors in Iran. The agreement was signed in

Tehran.

-Mahindra & Mahindra (M&M) and French automaker Renault have joined hands

yet again to establish a greenfield passenger car manufacturing plant in India within

five years.

- Mahindra & Mahindra inks deal with Global Vehicles USA Inc

31

2007

- Mahindra & Mahindra acquires a leading German Forging Company Schoneweiss

& Co. GmbH.

- Mahindra unveils new Bolero in Gujarat.

-Mahindra and Mahindra (M&M) has launched the line of sports utility vehicles

(SUV) and pick up trucks that it plans to begin selling in the United States starting

from 2009.

- M&M unveils Mahindra Pik-Up in Australia.

-The latest product from Mahindra Defence Systems, the Axe FAV is an extreme

offroading multi terrain defence purpose vehicle.

2008

-Mahindra & Mahindra acquires renowned Italian design house, GRD Italy.

2009

- Mahindra & Mahindra unveiled its fourth generation Scorpio at an unbeatable

price.

- Mahindra & Mahindra (M&M) signed a memorandum of understanding with the

State Bank of Bikaner and Jaipur (SBBJ) for vehicle finance.

- Mahindra launches luxury sedan XYLO

- M&M enters retail space with Mom & Me

- Mahindra sold 1,788 XYLOs in two weeks

32

- M&M signs pact with State Bank of Bikaner

- Mahindra gets order for 15,000 Xylo in three months

2010

- Mahindra & Mahindra has hiked prices of its products by up to Rs 18,000 due to

the in excise duty announced in the Budget.

- Anand Mahindra, vice-chairman and managing director, M&M, is keen on

attaining companies that boost M&M’s global aspirations. This can be done by

giving a combination of facilities, technology and dealer network. Meanwhile,

M&M came out as the ideal bidder for getting hold of a majority stake in

Ssangyong Motor Company (SMC).

- Mahindra & Mahindra announced its entry into the heavy commercial vehicle

segment in partnership with Navistar Inc of the U.S.

- M&M launched new mini-truck Maxximo

- Mahindra & Mahindra and Mitsubishi Agricultural Machinery tie-up to deliver

FarmTech prosperity

- Mahindra & Mahindra (M&M) announced that Mahindra Tractors has sold one-

lakh tractors in 2010.

- Mahindra & Mahindra Finance Services Limited (MMFSL) launched its new loan

against gold product in Kerala, which has been specifically designed in order to

provide liquidity against gold ornaments without selling them.

- Mahindra FirstChoice, TVS group in tie up

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-Company has splits its Face value of Shares from Rs 10 to Rs 5

2011

- Mahindra & Mahindra - Mahindra launched ‘Genio' - India's Next Generation

Pick Up

- Mahindra & Mahindra - Mahindra announces entry into Micro Irrigation Business

- Mahindra Satyam signs ERP contract with Omran

- Mahindra Group signs strategic alliance with Cisco Systems

- Mahindra & Mahindra - India Mahindra & Mahindra Ltd. completes acquisition

of a majority stake in SsangYong Motor Company

- Dr. Pawan Goenka appointed Chairman of SsangYong Motor Company.

- Mahindra & Mahindra - Mahindra launches 'Verito' the Logan with Mahindra

badge

- Mahindra & Mahindra - Mahindra launches the ‘New Bolero SUV'

- Mahindra & Mahindra - Mahindra launches a New SUV - XUV500

2012

- Mahindra and Mahindra had acquired Ssangyong Motor Company, a South

Korean SUV maker, almost a year ago and are now planning to set up a assembly

plant and invest Rs 800 crore over next 3-4 years

- Mahindra and Mahindra wins arbitration award and class action suit against

global vehicles

34

- Mahindra & Mahindra has entered the Kenyan passenger vehicles market with the

launch of their utility vehicles, XUV500 and Scorpio. Other vehicles include pick-

up range, Genio and Maxximo mini-truck

- Mahindra & Mahindra Ltd said that the company has signed an agreement with

Telephonics Corporation to form a joint venture, named as Mahindra-Telephonics

Integrated Systems Limited.

- Mahindra Ugine inked joint venture with Sanyo Special Steel & Mitsui & Co.

Ltd. names new venture as Mahindra Sanyo Special Steel Pvt Ltd.

2013

- Auto major Mahindra and Mahindra has inked partnership with online shopping

portal, Snapdeal.com to sell its two-wheeles on the site.

- Mahindra launches new visual identity reflecting modernity and dynamism

- Mahindra & Mahindra Ltd - Mahindra launches the Verito Executive edition

35

Mission Statement:-

To create India's largest automobile and automobile-related products

distribution network by providing dealers and customers with the largest choice of

unique world-class products and services.

“We don’t have a group-wide mission statement. Our core purpose is what makes

all of us want to get up and come to work in the morning”

-ANAND MAHINDRA

Vision Statement:-

Indians are second to none in the world. The founders of our nation and of our

company passionately believed this. We will prove them right by believing in

ourselves and by making M&M Ltd. known worldwide for the quality of its

product and services.

Mahindra wants to be among the top 10 automotive brands in the world. "The

lifecycle of automotive products is reducing very fast," he says. "The customer is

very demanding and his needs are changing rapidly. For driving growth in

business, we need a new product pipeline." Increasingly, Mahindra is positioning

itself to engineer those products by itself. It is even feeling emboldened to take

calculated risks, as it did with the XUV500's infotainment system, which also faced

some teething troubles.

"We got too aggressive in bringing a very advanced entertainment system to India,"

says Goenka. "We could have taken a safe route of bringing something that's tried-

and-tested and stayed a generation behind." When the issues with the XUV500

came to light, a cross-functional team of 15-20 members, led by senior officials

from R&D, purchase, servicing and quality worked with a German consultant to

36

address them. "It was important to understand customer issues for future vehicle

programmes," says Mahesh Babu, part of the XUV 500 team.

"Sometimes, it was quality, design or just a freak application outside the design

boundaries." He adds that the company's response time to customers has reduced

considerably. Most of Mahindra's R&D spends in 2012 went into launching new

product and engine refreshes, including Quanto and E20. It also included expenses

on its integration efforts with Ssangyong. "Ssangyong is jointly developing fuel-

efficient smaller engines with Mahindra, but M&M still has a long way to go," says

Mahantesh Sabarad, analyst at Fortune Financials.

"Currently, its six engines in the range of 1 to 1.6 litre, including petrol and diesel,

are being developed with Ssangyong to power some of the proposed new

launches." Auto sourcing is a lot about deriving economies of scale. If Mahindra

was to work on the six-engine platform on its own, it would be able to do volumes

of up to 80,000 annually.

With Ssangyong as partner, and suppliers from Korea and India, Mahindra can

produce about 300,000 engines per year. "It will not be enough," says

Ramakrishnan of Frost and Sullivan India, adding that improving quality should be

the company's first priority. Pravin Shah, CEO, automotive, M&M, calls quality a

'relative term’. “We make value-for-money products," he says. "Consumers do not

see quality in isolation; it's an entire value proposition." And Mahindra is chipping

away at it.

37

Long term objectives :-

Anand Mahindra, vice chairman and MD of Mahindra Group, believes the team has

a long way to go to reach its full potential. And apart from "establishing themselves

as a force in the circuit and further enhancing the reputation of the country in the

sport,

"Mahindra's long-term goal is to start a programmer through which Indian riders

can be nurtured for the big league.

"That is indeed our long term goal," says Mahindra. "But that is for later. My belief

is that we can't nurture riders if we don't know the game ourselves.

"We want to establish ourselves as one of the strongest teams in the circuit and then

we will slowly bring up Indian riders. Of course, slowly we will graduate to Moto2

(250cc). That's the next logical step," he adds.

"We are just two races old and it's great that we already made a mark by scoring

our first points. But there is a lot more to do in this season itself," says Mahindra.

"Our riders, Danny Webb (of England) and Marcel, are very experienced in the

circuit. Last Sunday's race was proof enough of their quality. As a manufacturer,

we are glad that we were able to provide the riders the best hardware possible. That

was my primary concern," he added.

The Mahindra bikes were indeed competitive in wet conditions at Jerez on Sunday

with Webb setting sights on a top-10 finish before he crashed out. Schrotter, the

junior rider in the team, took over though. Starting 23rd on the Grid, the 18-year-

old German made his way through the field to finish 13th.

Schrotter, who is in his fourth year in the 125cc Championship, was very happy

with the bike's performance after the race.

"It is very competitive and was handling very well too. We have small work here

and there. For instance, improvement has to be made during braking and that

should save us more time. But in a few races, if we keep improving at the same

rate, we would be fighting for podiums," said Schrotter.

38

Small improvements is what we are looking at now, adds Mahindra.

"The big improvement we have made so far was to bring down the weight of the

bikes as it will save us valuable time. One area in particular is the new titanium

exhaust system which saves a few pounds. As the season goes on we will further

develop the bikes," promises Mahindra.

And he expects a lot more from his senior rider Webb.

"Webb is just 19 years old. But he is a veteran in the circuit already and is very

talented. He probably pushed the bike a little too much last Sunday and I am sure

he has learnt from his mistake. He was very disappointed that he couldn't score the

team's first points and has promised to make amends in the coming races," smiles

Mahindra.

39

Various companies of automotive under Mahindra Group:-

1) Mahindra and Mahindra Automotive Division

2) Mahindra Graphic Research Design

3) Mahindra Navistar Automotive

4) Mahindra Navistar Engines

5) Mahindra Reva Electric Vehicle

6) Mahindra Vehicle Manufacturer

7) SSANGYONG Motor Company

8) Mahindra Trucks and Buses

40

1) Mahindra and Mahindra Automotive Division:-

Mahindra & Mahindra is the flagship company of the Mahindra

Group. Established in 1945, our core automotive and farm equipment businesses

have grown into market leaders whose triple bottom line ethic is driving industry

trends towards technological innovation, social responsibility, and constantly

improving customer satisfaction.

Over the years, we’ve spun off into new ventures in order to better meet the needs

of our customers, expanding into automotive and non-automotive components,

Information technology, Financial services, and energy. We operate in a federated

structure so that each business can take risks and grow on its own and

simultaneously leverage synergies across the entire Group’s competencies.

We’ve been the leader in utility vehicle for over fifty years, since we built the first

Willys jeeps under license on Indian soil in 1947. Today, our portfolio comprises a

wide spectrum of vehicles from two wheeler to heavy Trucks, SUVs to school

buses. Our services include maintenance and repairs, customization, providing

spares, and manufacturing and engineering. We’re opening a new organized-sector

market for pre-owned cars and expanding into foreign markets including the United

States and Europe.

41

2) Mahindra Graphic Research Design:-

Formed in 2008, Mahindra Graphic Research Design specializes in consulting on

automotive style, engineering, CAE (Computer-Aided Engineering), and project

management. Based in Beinasco, Italy, we consult with many European and global

automotive clients to create striking designs and support engineering.

Our style consulting services begin with a brand analysis to understand and then

shape brand identity. We offer concept definition for two wheeler’s, passenger

vehicles and light and heavy trucks. Next, we help with engineering processes

including the part design of BIW (body in white), exterior and interior trim, and the

instrument panel. We use CAE to model static and dynamic qualities, lifetime

wear and tear, safety, and autoform and moldflow manufacturing processes. We

also build prototypes and provide support for regulatory, plant process, and part

manufacturing compliance. Finally, we offer project management services from

project development to product to market support.

42

3) Mahindra Navistar Automotive:-

In 2005, Mahindra & Mahindra entered into a joint venture with Navistar Inc USA,

and Mahindra Navistar Automotive set out to build a range of indigenously

developed commercial vehicles for Indian terrain. Six years later, we’re still

creating and developing Light Commercial Vehicles (LCV) and Heavy

Commercial Vehicles (HCV) that continue to set the standards.

We manufacture a wide range of LCVs and HCVs that are rugged, reliable,

environmentally friendly and fuel-efficient. Designed ground-up in India with

technological assistance from Navistar Inc (USA), a market leader in trucks and

buses in the USA and the world’s largest mid-range engine manufacturer, our

trucks are created to fulfill requirements that are specific to your needs. Our new

state-of-the-art plant at Chakan, near Pune, is staffed by 800 highly trained

technicians, engineers, and specialists, and stretches over 700 acres.

Our constant drive to improve means that our range of trucks is not only high on

performance, but also low on maintenance. With rigorous tests to ensure high

performance even in the toughest of conditions and features that will make your

journey comfortable no matter how far you’re going, our trucks will help you

prosper in your business. Whether it’s goods, people or dreams, our trucks move it

all.

43

4) Mahindra Navistar Engines:-

In 2007, we formed Mahindra Navistar Engines (MNEPL) through a joint venture

with Navistar Inc, USA to produce diesel engines for medium and

heavy commercial vehicle in India. Navistar Inc is North America’s largest

integrated truck and engine manufacturer and the technology leader in emissions

control. Our partnership integrates the best of their expertise with ours to bring

India better, tougher, and cleaner engines.

Our plant at Chakan has an installed capacity of 45,000 engines per year. We’ve

already localized 70 percent of our engine components through 42 vendors. Our

engines are extensively validated for over 18,000 hours. We’ve tested them for 1.5

million km under different geographic conditions to make sure they will deliver the

best performance for both on and off highway applications.

Our first engine, the six cylinders, 207 HP Maxxforce engine, is already powering

25 and 49 to Mahindra Navistar Trucks on long distance hauls. The Maxxforce

platform ranges from 180 HP to 310 HP and is available in both mechanical and

electronic variants. The electronic common-rail Generation 3 version is the most

advanced engine available on Indian roads.

MNEPL is poised to grow to market leadership over the next few years. Through

exceptional dedication to quality and knowledge of the Indian market, we are

committed to developing a robust engine business that will improve truck

performance-and prosperity-for many Indian businesses.

44

5) Mahindra Reva Electric Vehicle:-

The concept of mobility is in the midst of significant change, driven by

environmental concerns, oil economics, rapidly changing consumer needs,

development of new technologies and integration of multiple disciplines in

developing mobility solutions. Sobering facts like rising fuel costs and rapid

urbanisation are just some of the reasons why the world is looking to newer,

superior mobility solutions.

The future of the automotive industry is electric. As we worry about climate

change, energy security, and the price of oil, technological improvements are

making electric cars ever cheaper and more convenient.

We acquired a majority stake in the Reva Electric Car Company in 2010 to advance

the design and production of electric cars worldwide. By integrating Reva’s

electric car technology with our own leading engineering, we can build higher

performance electric vehicles that satisfy customers’ demand both for better

lifestyles and a healthy environment.

At Mahindra REVA, we are constantly seeking solutions to issues that range from

the kind of products that will define the future and the technologies that will go into

these vehicles to the intelligence that these vehicles will possess and the way they

will be manufactured. These questions are shaping our vision of the Future of

Mobility. The advanced vehicles of the future will not only offer unmatched

features, safety, and convenience. They will also be clever and environmentally

friendly.

The increasing fusion of electronics and IT with automotive technologies will give

rise to vehicles with advanced intelligence and connectivity. Other developments in

distribution models, financing options, flexible ownership models, personalisation

45

of vehicles and greater choices across the ecosystem will further alter the entire

experience of interacting with the mobility ecosystem.

As a total systems solution provider, we develop all our Electric Vehicle (EV)

systems in-house. We are pushing EV technology to the next step to create better

energy management, faster charging, and advanced telematics. We offer

innovative electric vehicles and mobility solutions, technology licensing, and

licensed manufacturing and distribution.

We’re well established as a major global player with the largest deployed fleet of

electric cars on the road today. We’ve sold around 1,800 electric vehicles in

Europe, and more than 1,700 are on the road across Asia and Central and South

America. In total, we’re present in 24 countries worldwide and growing. The

Mahindra Group’s manufacturing expertise and wide global distribution network

will help Mahindra Reva scale up production and spread green technology across

the globe.

In 2012, we inaugurated a new plant in Bangalore, with the capacity to build

30,000 vehicles per year. In keeping with our commitment to clean technology, the

plant received a Platinum rating from Indian Green Building Council (IGBC). The

new facility harvests rainwater, uses natural light and ventilation, and harnesses

solar energy for electricity and heating. With this clean manufacturing process of

clean vehicles and a battery recycling program, our electric cars aim to have the

lowest dust-to-dirt carbon footprints in the automotive world.

In 2007, Reva was named one of India's Coolest Companies by Business Today We

received the 2008 Frost and Sullivan Powertrain Company of the Year award for

excellent sales volume, market penetration, and customer satisfaction. And in

2009, Business Week voted our founder and Chief Technology Officer, Chetan

Maini, one of India's top 50 most influential people. In 2010, the Reva-i was

crowned Car of the Year at the Overdrive & CNBC TV 18 awards.

In 2013, we were named amongst the Top 50 most innovative companies in the

world by Fast Company.

46

6) Mahindra Vehicle Manufacturers:-

Mahindra Vehicle Manufacturers was set up in 2007 to push our technology to the

edge. We designed and built a greenfield facility at Chakan, near Pune,

Maharashtra, to integrate the best in technology, environmental sustainability,

social responsibility, and operational excellence. Spread across 700 acres and

planted with approximately 10,000 trees, Chakan offers a flexible and eco-friendly

manufacturing layout for multiple Multi-Purpose Vehicles (MPVs), sport utility

vehicles (SUVs), and commercial vehicle that allows us to respond rapidly to

changing customer needs.

With a current capacity of 3.2 million vehicles per year and a future-ready

expandable module setup, we have the flexibility to constantly innovate and adapt

to changes in market demand or customer requirements. We currently manufacture

Mahindra & Mahindra’s entire medium and heavy commercial vehicle range from

the 0.75 ton Maxximo to the 49 ton Mahindra Navistar Trucks. The new Global

SUV and Pik-Up range will also be manufactured here.

Our staff of over 2,000 is highly trained in the fields of mechanical, electronic, civil

and electric engineering as well as paint technology. We partner with two regional

tribal Industrial Training Institutes (ITIs) to facilitate a match between educational

quality and content and industry demands. Our partnership has resulted in periodic

faculty training sessions, a restructuring of the curriculum, and the recruitment of

173 students to an apprenticeship training scheme by 2011. We also maintain our

own residential training centre which provides a month-long training to the selected

trainees before they initiate work at the shop floor.

47

We use solar energy and waste heat from the oven exhaust to power activities in

the paint shop, reducing our consumption of gas and electricity for an overall

reduction of 3,500 tons of CO2 per year. A cluster of 70 solar dishes provides the

energy for cooling the paint used for the vehicle bodies. And by recycling waste

water through reverse osmosis and multiple effect evaporation, we achieve zero

water discharge across the entire plant.

7) SSANGYONG Motor Company:-

The Ssangyong Motor Company joined Mahindra & Mahindra in 2011. Founded

in 1954 as the Ha-dong-hwan Motor Workshop, Ssangyong is today a major player

in the South Korean utility vehicle space and enjoys a market presence in more

than 90 countries. Based in Pyeongtaek, South Korea, Ssangyong is more than

4,800 people who are passionate about cars.

In the 1960s, we built Korea’s first large buses and began exporting them in

1966. In the 1970s, we expanded into specialized trucks from buses to fire

trucks. We welcomed the era of four-wheel drive with new independently

developed platforms, the Korando, and Musso, in 1993. In 1997, we introduced

the Chairman, one of Korea’s leading luxury sedans. Today, we are a leader

in SUV’s with a full product line including RextonII Kyron, Kerando, Actyon

and Actyon sports. We also offer sedan and MPV product lines, Chairman

and Rodius.

48

We’re currently focusing on strengthening our global competitiveness by

producing environmentally friendly engines. We’ve developed an eco-friendly

diesel common rail engine to conform to the EURO5 standards. We are also

designing an engine to comply with the EURO6.

In the next few years, we plan to strengthen our global distribution network. We

have already set up local head offices and parts centers in Europe. We believe that

emerging markets are the key to sustainable growth, and we are building local

bases in markets such as Central America, Eastern Europe, Africa, China, and

India.

In addition to our focus on green technology and developing markets, we look

forward to capitalizing on our new relationship with Mahindra & Mahindra. Both

known for our SUV’s, we can strengthen our positions in the SUV market through

technical cooperation and shared expertise.

49

8) Mahindra Trucks and Buses:-

Indian roads can be more than a little challenging thanks to wide variation in

terrain, inclement weather, and a large percentage of unpaved or unmaintained

routes. To succeed, you need a transportation solution that can handle it all. We

designed Mahindra trucks from the ground-up in India to excel in Indian

conditions, so that you have a more than able partner in your business.

At the core of our Heavy Commercial Vehicle range are our revolutionary

MaxxForce engines. These state of the art engines deliver high performance at

high fuel efficiency and meet EPA and Euro emissions standards. Join us at the

cutting edge of pro-environment business solutions.

Our trucks come in multiple sizes, depending on the load carrying capacity. A

strong and durable suspension, rugged chassis aggregates, robust brakes, and heavy

duty axles to handle its superior torque, are designed to be low maintenance and

easy to repair. Coupled with best-in-class ride and handling, and low turning radius

for excellent maneuverability and generous cabin space - this makes for a pleasant

ride for you and a passenger.

In addition we also offer buses and special vehicles through our Tourister range of

vehicles

We meet both Indian and European safety standards to make sure you’re safe even

in adverse driving conditions.

50

� Strategic management process:

A. Strategic formulation

B. Vision & mission

C. Opportunities & threats

D. Long term objectives

E. Alternative strategy

F. Strategy selection

Strategy implication:-

The Mahindra Group has a new tagline, which reflects a new strategy. It's a call to

action a core purpose that will galvanize employees, customers and stakeholders in

coming together to form a more cohesive, formidable unit. The Mahindra brand

logo will read as Mahindra Rise from here onwards. This tagline is the acceptance

of no limits in creativity, alternative thinking and drive positive change. This is not

some corporate branding but a new strategic move that will cost the Mahindra

Group Rs 120 crore over the next three years. It will strengthen Anand Mahindra's

federation of companies. This is a strategic move.

The Global Recruit Program from the Mahindra Group empowers you to learn and

experience firsthand the challenges and opportunities presented by a changing

world and an evolving global economy by working with one of India’s biggest and

most dynamic corporate houses. At Mahindra, you will be placed in positions of

real time responsibility and operations, where you will be enabled and encouraged

not only to participate in actual day to day operations, but also make strategic

decisions that have significant strategic implications on Mahindra’s national and

global business operations. All in an atmosphere that constantly encourages you to

use your learning and education to come up with your own ground breaking ideas

and initiatives.

In the 21st century, the focus of the world will be on the emerging markets of Asia

and the economies powered by the aspirations and energies of their billions. In such

51

a 'flat' world, experience in countries like 'India' instead of being considered a plus,

will rather be mandatory, and your success in the global marketplace of the future

will depend on whether you have this knowledge or not.

The Office of Strategy Management, or OSM for short, is an internal consulting

agency which is responsible for ensuring a robust strategy cycle across the group

with research and developmental activities focused on identifying and pursuing

cross sector business initiatives. In addition to heralding corporate outreach and

promotional activities and serving as a sounding board for the management board

and the top brass, it is focused towards an active promotion of best practices and

collaborations across the organization.

The OSM forms the focal point of the entire program, as a platform for the period

of your working association with the Mahindra Group, and as a classroom for your

knowledge assimilation while on the job.

52

Annual objective

Company tracks the objectives and targets laid out in the road map of the triple

bottom line approach. Various green projects have been implemented by your

Company in the areas of abatement of air pollution, recycling and reduction of

water and Solid Waste Management in accordance with world class Green supply

chain standards. Your Company’s commitment to the environment stems from the

Mahindra Group’s abiding concern for all stakeholders of society.

We have various annual objective plans:

Investor relation

In line with the best practices aimed at fostering improved investor relations, our

Company engaged with investors in many ways, including one on one meetings,

attendance at investor conferences, regular quarterly earnings calls and annual

analyst meet during the year. New technology, including telepresence and

webcasting enabled in our Company to reach out to a large number of investors.

our Company interacted with over 550 Indian and overseas investors and analysts

from a wide cross section of the investment universe during the year. Several

investor/analyst interactions with the Chairman & Managing Director and Business

Heads were organised during the year. our Company won top awards/ ranking in

various investor relations categories from Thomson Reuters Extel Survey for 2011

(awarded in June 2012) and from Institutional Investor, Asia, for the year 2012. A

user friendly investor relations page on the Company’s Corporate Website ensures

the benefit of easy access to relevant information for

Investors. In future we will try to give our effort and encourage to investor to

invest our company.

53

Industrial relation

Our Company has focused on propagating proactive and employee centric shop

floor practices, quick grievance resolution mechanisms and alignment to overall

business

goals, thus ensuring that there was no loss of production in the Financial Year

2013. As a result of propagating employee engagement as a business imperative,

Financial Year 2013 recorded the highest production figures in the history of the

Company.

Over the last few years, your Company has placed significant emphasis on

enhancing capabilities at the shop floor, beyond merely technical skills. Operators

are trained and encouraged to generate ideas for resolving quality concerns,

reducing cost, improving safety and efficiency. For the year under review, the

workmen generated over 19 ideas per person towards this cause.

Safety, Occupational Health and Environment

Company has a well-established Safety, Occupational Health & Environmental

Policy (“SH&E Policy”) in line with the National Safety, Occupational Health &

Environmental Policy. The safety and occupational health of employees is a major

area of focus for the Company. The SH&E Policy, inter alia, covers the safety of all

stakeholders, ensures compliance on a monthly basis and imparts necessary

education and training to all employees and stakeholders. External surveillance

audits of the facilities as per legal and other requirements are conducted regularly.

Internal and external medical check-ups of employees and contractors are

conducted.

Company tracks the objectives and targets laid out in the road map of the triple

bottom line approach. Various green projects have been implemented by your

Company in the areas of abatement of air pollution, recycling and reduction of

water and Solid Waste Management in accordance with world class Green supply

54

chain standards. Your Company’s commitment to the environment stems from the

Mahindra Group’s abiding concern for all stakeholders of society.

Corporate Social Responsibility:

Mahindra’s Corporate Social Responsibility (“CSR”) is committed to ‘building

possibilities’ for socially and economically communities to enable them to ‘RISE’

above their limiting circumstances. Some of the major objective the Company has

undertaken in India during the Financial Year 2013 are described below:

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Project Nanhi Kali:-

Nanhi Kali, which supports the education of the disadvantaged girl child, has been

the flagship programme of the K. C. Mahindra Education Trust (“KCMET”) since

1996.

The Nanhi Kali sponsorship provides underprivileged girls with academic support

classes where concepts of Maths, Science and Language are taught to the girls. In

addition, the girls are provided with material support including uniforms, school

bags, shoes, socks and stationery which allow them to attend school with dignity.

In the Financial Year 2013, 7,414 individuals and corporates donated Rs. 22.65

crores to the Nanhi Kali Project, enabling the Project to support the education of

78,338 underprivileged girls across 9 states of India. The largest donor is the

Mahindra Group, which supports the education of 29,702 Nanhi Kalis. This

initiative has had a significant impact in terms of increase in learning outcomes by

10% and curtailing drop out of girls from school to less than 10%.

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Mahindra Pride Schools:-

The Mahindra Pride Schools through their one-of-a-kind livelihood training

programmers continue to take forward their vision to completely transform youth

from socially disadvantaged communities by training and placing them in high

growth service sector careers. The last Financial Year witnessed the setting up of

the 5th Mahindra Pride School in Srinagar in October 2012, where the 1st batch of

students braved extreme weather and socio-political unrest to complete their

training and are now ready to be placed. In the Financial Year 2013, a total of

2,605 Scheduled Caste/Scheduled Tribe students received intensive training at the

5 Mahindra Pride Schools in Pune, Chennai, Patna, Chandigarh and Srinagar.

Areas of training included Hospitality Craft, Information Technology Enabled

Services (ITES – for BPOs and KPOs) and Customer Relationship Management.

The total number of Mahindra Pride School students trained till date is 5,666. Post

training, the Mahindra Pride School students have been recruited by food chains

such as McDonald’s, Pizza Hut, KFC and Café Coffee Day, 5 star Hotels such as

Hotel Le Meridien, Department Stores such as Westside, Mom & Me and BPOs &

KPOs such as Bajaj Allianz, Syntel, HCL, TCS, Dell, Cognizant, Tech Mahindra

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and Mphasis. There has been 100% placement of students in lucrative jobs and a

consistent increase in average salary per batch. The average salary is currently over

Rs. 10,000 per month.

Scholarships and Grants:-

Every year Mahindra rise spend crore rupees to prove better education to society

which is main objective of Mahindra rise. The programmes are

Mahindra All India Talent Scholarships Instituted in 1995, Mahindra All India

Talent Scholarships (“MAITS”) are awarded to students from lower socio

economic strata to enable them to pursue a job oriented diploma course at a

recognized Government Polytechnic Institute in India. Approximately 500

scholarships are given every year to students who undergo a three year course. In

the Financial Year 2013, 550 students were awarded the MAITS leading to a

disbursement of Rs. 91.43 lakhs. MAITS has been awarded to 6,354 students till

date.

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K. C. Mahindra Scholarships for Post-Graduate studies abroad:-

In the Financial Year 2013, 44 students were awarded a scholarship of Rs. 2 lakhs

each. Recipients will be doing their post-graduation in a wide range of subjects like

Computer Science and Engineering, Mechanical Engineering, Electrical

Engineering, Chemical Engineering, Economics and Law and had received

admission in renowned universities like Harvard Business School, Yale, Stanford,

Massachusetts Institute of Technology, Carnegie Mellon, London School of

Economics, etc. Further, the K. C. Mahindra Fellows Fund awarded scholarships of

Rs. 24 lakhs to the top 3 candidates (a maximum scholarship of Rs. 8 lakhs each).

The total number of scholarships given till date is 1,070.

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K. C. Mahindra United World Colleges (“UWC”) Scholarships:-

Till date 86 students have benefited from the K. C. Mahindra UWC Scholarship

enabling them to study at the United World Colleges, and in particular,

the Mahindra United World College. KCMET has disbursed a total of Rs. 655.31

lakhs in the form of these scholarships. During the Financial Year 2013,

12 students were given scholarships amounting to a disbursement of Rs. 69.31

lakhs.

Mahindra Search for Talent Scholarship:-

This scholarship which rewards excellence in academics has been set up in 35

institutions in India. In addition, students who receive the Mahindra Search for

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Talent Scholarship for two consecutive years also receive the Honours Scholarship

Award comprising a cash prize of Rs. 5,000 and a citation from the Trust.

B. Policies

The Indian economy performed poorly in the Financial Year 2012-13.

Faced with economic turbulence abroad and an unsupportive policy environment at

home, industrial activity slowed steadily through the year, critical infrastructural

projects stalled and private corporate investments lost much of their dynamism. A

weak south-west monsoon added further stress. Company follows a prudent

financial policy and aims to maintain optimum financial gearing at all times. The

Company’s total Debt to Equity Ratio was 0.24 as at 31st March 2013.

In January 2013, the Government of India announced a policy for partial

deregulation of diesel prices. In line with this policy and market dynamics, the

diesel – petrol price gap has narrowed from Rs. 30 in Q1 F13 to Rs. 21 in Q4 F13.

This will impact the cost of ownership and may have an impact on the demand of

your Company’s products, as almost all its products are diesel powered.

Remuneration Policy:-

While deciding on the remuneration for Directors, the Board and the Governance,

Remuneration and Nomination Committee takes into consideration the

performance of your Company, the current trends in the industry, the qualification

of the appointee(s), their experience, past performance and other relevant factors.

The Board/ Committee regularly

keeps track of the market trends in terms of compensation levels and practices in

relevant industries. This information is used to review the Company’s remuneration

policy from time to time.

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II. Remuneration to Non-Executive Directors for the year ended 31st March

2013:-

The eligible Non-Executive Directors are paid commission upto

a maximum of 1% of the net profits of the Company as specifically computed for

this purpose. During the year under review, the Non-Executive Directors were paid

a commission of Rs. 172.99 lakhs (provided in the accounts for the year ended 31st

March 2012), distributed amongst the Directors.

Whistle Blower Policy:-

Our Company promotes ethical behavior in all its business activities and has put in

place a mechanism wherein the Employees are free to report illegal or unethical

behaviour, actual or suspected fraud or violation of the Company’s Codes of

Conduct or Corporate Governance Policies or any improper activity to the

Chairman of the Audit Committee of the Company or Chairman of the Company or

Corporate Governance Cell. The Whistle Blower Policy has been appropriately

communicated within the Company. Under the Whistle Blower Policy, the

confidentiality of those reporting violation(s) is protected and they are not subject

to any discrimination. No personnel has been denied access to the Audit

Committee. Our Company has not adopted the other non-mandatory requirements

as specified in Annexure I D of Clause 49.

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Principle-wise (as per NVGs) BR Policy/policies

The Business Responsibility Policy (“BR Policy”) encompassing the following 9

principles as per the National Voluntary Guidelines on Social, Environmental and

Economic Responsibilities of Business (NVGs), duly approved by the Board, is in

place. This policy is operationalized and supported by various other policies,

guidelines and manuals.

1: Businesses should conduct and govern themselves with Ethics, Transparency

and Accountability.

2: Businesses should provide goods and services that are safe and contribute to

sustainability throughout their life cycle.

3: Businesses should promote the wellbeing of all employees.

4: Businesses should respect the interests of, and be responsive towards all

stakeholders, especially those who are disadvantaged, vulnerable and marginalized.

5: Businesses should respect and promote human rights.

6: Business should respect, protect, and make efforts to restore the environment.

7: Businesses, when engaged in influencing public and regulatory policy, should do

so in a responsible manner.

8: Businesses should support inclusive growth and equitable development.

9: Businesses should engage with and provide value to their customers and

consumers in a responsible manner.

The Company has a Green Supply Chain Management policy, which has been

shared with Suppliers. Under this the Company is committed to improve the

Awareness about legal compliances, enhance Eco efficiencies, packaging/logistics

improvements and employee health and safety initiatives at the supplier end, etc.

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To actualize this commitment, the Company engages with its suppliers and vendors

on a regular basis through supplier meets and training sessions. To institutionalize

sustainable practices across supply chain, the Company has institutionalized

sustainability awards for suppliers. These initiatives are at various stages of

maturity with various suppliers and hence determining the percentage of inputs

sourced sustainably is difficult.

Postretirement medical POLICY

The Company provides post-retirement medical cover to select grade of employees

to cover the retiring employee and their spouse up to a specified age through med

claim policy on which the premiums are paid by the Company. The eligibility of

the employee for the benefit as well as the amount of medical cover purchased is

determined by the grade of the employee at the time of retirement.

C. Motivate employees

Our motivation to give our best every day comes from our core purpose: we

will challenge conventional thinking and innovatively use all our resources to drive

positive change in the lives of our stakeholders and communities across the world,

to enable them to Rise.

Our products and services support our customers’ ambitions to improve their

living standards; our responsible business practices positively engage the

communities we join through employment, education, and outreach; and our

commitment to sustainable business is bringing green technology and awareness

into the mainstream through our products, services, and light-footprint

manufacturing processes.

This commitment to sustainability—social, economic, and environmental—rests

upon a set of core values. They are an amalgamation of what we have been, what

we are, and what we want to be. These values are the compass that guides our

actions, both personal and corporate. They are:

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Professionalism:-

We have always sought the best people for the job and given them the freedom and

the opportunity to grow. We will continue to do so. We will support innovation

and well-reasoned risk taking, but will demand performance.

Good corporate citizenship:-

As in the past, we will continue to seek long-term success, which is in alignment

with the needs of the countries we serve. We will do this without compromising

ethical business standards.

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Customer first

We exist and prosper only because of the customer. We will respond to the

changing needs and expectations of our customers speedily, courteously and

effectively.

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Quality focus

Quality is the key to delivering value for money to our customers. We will make

quality a driving value in our work, in our products and in our interactions with

others. We will do it 'First Time Right.'

Dignity of the individual

We will value individual dignity, uphold the right to express disagreement and

respect the time and efforts of others. Through our actions, we will nurture

fairness, trust, and transparency.

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Employee Social Options

Esops stands for Employee Social Options. Esops is a platform offering employees

a set of social work volunteering options. These options are created and

implemented exclusively by employees themselves based on the needs of

underprivileged communities in and around their areas of operation. In a way, it is

each employee’s CSR initiative. Esops enables the workforce to collectively donate

thousands of human hours for various social projects, in the three focused areas of

Education, Health and Environment, making social work an integral part of

everyone’s lives. In this manner

Esops enables our employees to give not just their wealth but also their time. To

fund these employee initiatives, each Sector of the Company donates 0.5% of its

profit after tax to the Central CSR fund and 0.5% to Esops. Some notable Esops

initiatives during the year were the Lifeline Express at Puri in Odisha and at

Naksalbari in West Bengal where a total of 4,219 patients were treated by

performing surgeries, giving medicines and distribution of aids and appliances free

of cost. Another notable initiative

was Mahindra Hariyali where the 1 million tree plantation target was surpassed by

planting more than 1.7 million trees. Esops Awards – 2012, Esops Star Performers

Awards, Group level Esops Champions Meet were organised to motivate

employees and ensure their maximum participation in Esops. The other Esops

activities included numerous initiatives in the fields of Education, Health,

Environment, etc. which had a

short term as well as a long term impact on the beneficiaries and society at large.

Esops is also a culture that the Mahindra Group has cultivated as an ethic. The

Esops platform and a set of structures and protocols have been created, to make it

easier and possible for every employee, who wishes to make a contribution to

society, to do so.

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Provide Employee Benefits

� Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit

payable is the greater of the amount calculated as per the Payment of Gratuity Act

or the Company scheme applicable to the employee. The benefit vests upon

completion of five years of continuous service and once vested it is payable to

employees on retirement or on termination of employment. In case of death while

in service, the

gratuity is payable irrespective of vesting. The Company makes annual

contribution to the group gratuity scheme administered by the Life Insurance

Corporation of India through its Gratuity Trust Fund.

� Post retirement medical

The Company provides post retirement medical cover to select grade of employees

to cover the retiring employee and their spouse upto a

specified age through mediclaim policy on which the premiums are paid by the

Company. The eligibility of the employee for the benefit as

well as the amount of medical cover purchased is determined by the grade of the

employee at the time of retirement.

� Post retirement housing allowance

The Company operates a post retirement benefit scheme for a certain grade of

employees in which a monthly allowance determined on the

basis of the last drawn basic salary at the time of retirement, is paid to the retiring

employee in lieu of housing.

The Company has allotted 55,24,219 Ordinary (Equity) Shares of Rs. 10 each,

10,00,000 Ordinary (Equity) Shares of Rs. 10 each and 1,73,53,034 Ordinary

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(Equity) Shares of Rs. 5 each in the years ended 31st March, 2002, 31st March,

2010 and 31st March, 2011 respectively to the Mahindra & Mahindra Employees’

Stock Option Trust set up by the Company. The trust holds these shares for the

benefit of the employees and issues them to the eligible employees as per the

recommendation of the Compensation Committee.

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Resources allocation

"Providing the essentials needed to create detailed and intelligent factory models,

Factory CAD allowed our planners to use ‘smart objects’ to represent their factory

resources."

Anupam Patil

Senior Manager, IT and PLM

Mahindra Vehicle Manufacturers

Factory CAD was used to create 3D plant layouts for all of the Chakan plant

production lines, including body and trim, chassis and final (TCF). “Providing the

essentials needed to create detailed and intelligent factory models, Factory CAD

allowed our planners to use ‘smart objects’ to represent their factory resources,”

says Anupam Patil, senior manager, IT and PLM, Chakan plant, Mahindra

Vehicles.

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Core purpose:-

We will challenge conventional thinking and innovatively use all our resources to

drive positive change in the lives of our stakeholders and communities across the

world, to enable them to Rise.

To unite all our companies through one common thread, we harmonized the

communication of 60 Group Companies via the unique SAP platform. This

integration of processes across core functions is helping channelize inter-company

expertise, enhance efficiency and optimize resources.

Our Company has always been aware of the need for conservation of energy and

natural resources and has been consciously making efforts year on year towards

improving the energy performance. Energy efficiency improvement initiatives have

been implemented across

all the plants and offices by undertaking various energy conservation projects.

Our Company ensures strict compliance with all the statutory requirements and has

taken several sustainable steps voluntarily to contribute towards better environment

like

1. Reduction in Sp. carbon footprint in spite of production increasing continuously.

2. Effective effluent and sewerage treatment, recycle and reuse of water.

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3. Reduce, reuse, and recycle of waste and eco-friendly waste disposal.

4. Reduction in water footprint and encouraging rain water harvesting.

5. Saving of natural resources like Electricity, Oil, Fuel, etc.

6. Use of Renewable Energy in Manufacturing.

7. Use of natural lighting and natural ventilation.

During the year, the Company has taken the following resources to manufacturing

vehicles

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Engineering Initiatives:-

� Installation of heat recovery systems on Paint shop oven exhaust for hot

water generation and air preheating.

� Installation of Closed Loop efficient Cooling tower in Body Shops for gun

cooling.

� Installation of VFD’s at select locations.

� Installation of Energy Saving Magnetic Induction Lamps for Shop and

Street Lighting.

� Energy Savers for Air-Conditioners in various offices.

� Replacement of inefficient compressor with energy efficient compressors.

� Installation of fan less cooling tower.

� Replacement of electrical heaters with gas burners in heat treatment

furnaces.

� Flat belt instead of V belt for blowers.

� Installation of energy efficient pumping system.

� Light Pipe installation in offices.

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Process Improvement:-

� Optimization in VFD Frequency.

� Energy efficient Burners for plant canteen.

� No air loss drain valves for moisture removal from compressed air.

� Timers for blowers, fans and lights.

� Lighting sensor auto-switches for lighting.

� Downsizing Motors HP by Optimizing Operation periods.

� Conversion of hot coolant to cold coolant for cleaning parts.

� Processing of more BMT/Cabs per skid.

� Conversion of Paint shop AED to CED process at Zaheerabad.

� Energy reduction of slab cores using cold box instead of hot box at molding

in Foundry. Improvements through small group activities.

� Adjustment of chiller temperature.

� Replacing tube light Electromagnetic ballasts with Electronic ballasts.

� Installation of Motion Sensors in various areas.

� Energy saving by switching off high bay lamps.

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Use of resources to Awareness on Energy Consumption:-

� Energy Conservation Week celebration at all plants.

� Energy Conservation Oath at all locations.

� E-mailer’s and Wallpapers for awareness.

� Display of posters and slogans on energy conservation.

� Material Developments in Human Resources/ Industrial Relations for

Automotive and Farm Equipment Sectors.

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The strategic purpose of Human Resources in the Mahindra

Group is to be the change agent for creation of a cultural transformation to

create competitiveness at the marketplace through sustained business

outperformance while simultaneously addressing the needs of all its stakeholders,

starting with customers and employees and strengthening the core values of the

Group. In the long run, the metric for success would be improvements in the total

factor productivity, while addressing the business imperatives of cash, cost,

competence and confidence. The emphasis was on aligning all the HR levers

towards achieving these goals. In line with the above, the internal transformation

journey through Rise to create a company of tomorrow saw a slew of initiatives

taken to bring the Rise cultural pillars of Accepting No Limits, Alternative

Thinking and Driving Positive Change alive through the nuts and bolts of HR

levers. The philosophy of Rise and its three cultural pillars have got a buy-in from

employees across the Group. In order to ensure internalization of this culture, the

Mahindra Leadership Competency Framework has been developed and rolled out

across the company. A complete integration of these competencies has been

achieved in recruitment, on-boarding and other HR processes. We are now working

towards integrating Rise with other HR levers like Talent Management, Leadership

Development, Rewards and Recognition and the Performance Management

System.

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MARKET RESEARCH

S.N. Company Name Market Share

1 Maruti Suzuki 37%

2 Hyundai Motors India Ltd. 14.4%

3 Tata Motors 13.1%

4 Mahindra and Mahindra 11.4%

5 Toyota 6.4%

6 General Motors 3.3%

7 Ford 3.2%

8 Honda 2.9%

9 Volkswagen 2.4%

10 Nissan 1.5%

India is the second fastest growing automobile market in the world after China.

The Automobile Industry in India is one of the largest and is the fastest growing

industry, world-wide. There has been a dramatic development and change

in Automobile industry, particularly for the last couple of years. With many

companies now concentrating more on customer needs and price factors, there has

been a sharp rise.

The reason behind this is simple; foremost, there is an increase in demand for more

and more usage of automobiles and second, there is a sharp rise in the percentage

of profit that the Automobile manufacturers make, contributing a considerable

income to the Indian economy as well.

The Indian Automobile Industry manufactures over 1.1 Crores of vehicles and

exports about 15 lakhs each year. The dominant products of the automotive

industry are two-wheelers that occupy a market share of around 75%. Passenger

cars have a market share of about 16% while commercial vehicles and three-

wheelers share about 9% between them.

The economic scenario is also encouraging for the buyers to buy more vehicles and

thus the demand is likely to increase. But will 2013 be a good year for Automobile

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industry in India? Our expert Astrologers has analyzed the planetary positions for

the year 2013 to forecast the future of Automobile industry in India. Here are the

findings;

The forth coming year, due to the placement of planets Saturn (signifying

profession), Jupiter(indicating money), Rahu and Ketu (Rahu & Ketu being the two

most powerful planets) in the sign Libra, Gemini, Libra and Aries respectively will

have more impact on any industry.

The planet Saturn (planet indicating profession) is in the powerful sign Libra which

is ruled by Venus (the planet indicating vehicles) during the year 2013. But, it is

going to retrograde (backward movement of planets) from February 18th 2013 to

7th July 2013.

Saturn is exalted and Jupiter (signifying money) will be transiting to the 3rd House

(indicating communication technology) in that natal chart, in the sign Gemini. So

there are bright chances for the implementation of communication technology in

the Automobile Industry.

Also, new manufactures will come up and there will be tough competition in

the automobile industry during 2013. New low cost cars and bikes will strike the

market and due to the introduction of new automobiles, manufacturers will try to

boost a considerable increase in their production, so as to compete in the heavy

competition which is much tougher. This is due to the placement of Rahu and

Saturn in the sign Libra.

Thus the Automobile Industry in India will see development in terms of

technological advancements and also increase in production during 2013, which

will passively boost up the Indian economy in regards with the same.

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Environmental analysis :-

Mahindra & Mahindra, branded on its products usually as 'Mahindra', produces

SUVs, saloon cars, pickups, commercial vehicles, and two wheeled motorcycles

and tractors. It owns assembly plants in Mainland China (PRC) and the United

Kingdom and has three assembly plants in the United States. Mahindra maintains

business relations with foreign companies like Renault SA, France and Navistar

International, USA.

M&M has a global presence and its products are exported to several countries. Its

global subsidiaries include Mahindra Europe Srl. based in Italy, Mahindra USA

Inc., Mahindra South Africa and Mahindra (China) Tractor Co. Ltd.

Mahindra started making passenger vehicles firstly with the Logan in April 2007

under the Mahindra Renault joint venture. M&M will make its maiden entry into

the heavy trucks segment with Mahindra Navistar, the joint venture with

International Truck, USA.

Mahindra produces a wide range of vehicles including MUVs, LCVs and three

wheelers. It manufactures over 20 models of cars including larger, multi-utility

vehicles like the Scorpio and the Bolero. It formerly had a joint venture with Ford

called Ford India Private Limited to build passenger cars.

At the 2008 Delhi Auto Show, Mahindra executives said the company is pursuing

an aggressive product expansion program that would see the launch of several new

platforms and vehicles over the next three years, including an entry-level SUV

designed to seat five passengers and powered by a small turbo diesel engine. True

to their word, Mahindra & Mahindra launched the Mahindra Xylo in January 2009,

and as of June 2009, the Xylo has sold over 15000 units.

Also in early 2008, Mahindra commenced its first overseas CKD operations with

the launch of the Mahindra Scorpio in Egypt, in partnership with the Bavarian Auto

Group. This was soon followed by assembly facilities in Brazil. Vehicles

assembled at the plant in Bramont, Manaus, include Scorpio Pik Ups in single and

double cab pick-up body styles as well as SUVs.

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Mahindra planned to sell the diesel SUVs and pickup trucks starting in late 2010 in

North America through an independent distributor, Global Vehicles USA, based in

Alpharetta, Georgia. Mahindra announced it will import pickup trucks from India

in knockdown kit (CKD) form to circumvent the Chicken tax. CKDs are complete

vehicles that will be assembled in the U.S. from kits of parts shipped in crates. On

18 October 2010, however, it was reported that Mahindra had indefinitely delayed

the launch of vehicles into the North American market, citing legal issues between

it and Global Vehicles after Mahindra retracted its contract with Global Vehicles

earlier in 2010, due to a decision to sell the vehicles directly to consumers instead

of through Global Vehicles. However, a November 2010 report quoted John Perez,

the CEO of Global Vehicles USA, as estimating that he expects Mahindra’s small

diesel pickups to go on sale in the U.S. by spring 2011, although legal

complications remain, and Perez, while hopeful, admits that arbitration could take

more than a year. Later reports suggest that the delays may be due to an Mahindra

scrapping the original model of the truck and replacing it with an upgraded one

before selling them to Americans In June 2012, a mass tort lawsuit was filed

against Mahindra by its American dealers, alleging the company of conspiracy and

fraud.

Mahindra & Mahindra has a controlling stake in Mahindra Reva Electric Vehicles.

In 2011, it also gained a controlling stake in South Korea's SsangYong Motor

Company.

Mahindra has launched its relatively heavily publicized SUV, XUV 500, code

named as W201 in September 2011. The new SUV by Mahindra has been designed

in-house and it is developed on the first global SUV platform that could be used for

developing more SUVs. In India, the new Mahindra XUV 500 comes in a price

range between Rs 11.40 lakh to Rs 15 lakh. Besides India, the company also targets

Europe, Africa, Australia and Latin America for this model. Mahindra President Mr

Pawan Goenka stated that the company plans to launch six new models this fiscal.

The company launched CNG version of its mini truck Maxximo on 29 June 2012.

A new version of Verito in diesel and petrol options was launched by the company

on 26 July 2012 to compete with Maruti's Dzire and Toyota Kirloskar Motor's

Etios.

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Other uses vehicles:-

Military Defense:-

The company has built and assembled military vehicles, commencing in

1947 with the importation of the Willys Jeep for use in World War II. Its line of

military vehicles includes the Axe. It also maintains a joint venture with BAE

Systems, Defense Land Systems India.

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Provide Energy to world:-

Mahindra & Mahindra entered the energy sector in 2002, in response to growing

demands for increased electric power in India. Since then, more than 150,000

Mahindra Powered engines and diesel generator sets (genets) have been installed in

India, offering standard proper quality power, as do larger companies, in areas with

arguably less reliable grid electricity. The inverters, batteries, and genets are

manufactured at three facilities in Pune (Maharashtra), Chennai (Tamil Nadu), and

Delhi; and 160 service points across India offer 24-7 support to most key markets.

Powerol is present in countries across Latin America, Africa, the Middle East, and

Southeast Asia—and expanding into the United Arab Emirates, Bangladesh, and

Nepal. Mahindra Powerol's energy services consist mostly of power leasing and

telecom infrastructure management. In 2006, it became a major market leader in

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the telecom segment (and in 2011, its market share passed 45 percent). In 2007, it

won the Frost and Sullivan "Voice of the Customer" award for best practices in

telecom. Mahindra Clean tech Ltd specializes in eco-friendly, or 'green' power. In

response to growing acceptance of Solar Power, it formed a subsidiary, Mahindra

Solar, in 2010 to offer a range of solar solutions, both off grid and on grid,

alongside Engineering, Procurement, and Construction (EPC).

Mahindra EPC is the Engineering Procurement & Construction arm of the

Mahindra group. A portfolio company under the Clean tech arm of Mahindra

Partners, they offer solar solutions spanning On-Grid solutions, EPC (Engineering,

Procurement and Construction) and Off-Grid Product solutions. The company

commenced its operations in the year 2011 and has successfully commissioned

over 60 MW worth of Solar PV projects. Meanwhile, its off-grid products include

power packs and rooftop setups for business organizations and public institutions

alongside rural electrification through lanterns and home and street lighting

systems. The company works closely with Mahindra’s farm equipment division to

offer lighting products to some of the more rural areas in India. It also works with

Mahindra Powerol to offer solar power backup to telecom sites in India. In 2011,

Mahindra Solar received a CRISIL rating of SP1A in 2011, the highest rating for

any solar photovoltaic off-grid company.

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Mahindra’s Farm equipment

Development of a load-car. In 2007, Mahindra & Mahindra won the Deming

Application Prize and the Japan Quality Medal for Total Quality Management

excellence in entire business operations. Mahindra began manufacturing tractors for

the Indian market sometime during the early '60s. Today, it is one of the top three

tractor companies in the world with annual sales totaling more than 150,000

tractors. It has expanded its product-line to include farm-support services via

Mahindra AppliTrac (farm mechanization products), Mahindra ShubhLabh (seeds,

crop protection, and market linkages and distribution), and the Samriddhi Initiative

(farm counseling and information services).

Mahindra & Mahindra’s farm equipment division (Mahindra Tractors) is one of the

largest tractor companies in the world, with more than 1,000 dealers servicing more

than 1.45 million customers. Mahindra tractors are available in 40 countries,

including India, the United States, China, Australia, New Zealand, Africa (Nigeria,

Mali, Chad, Gambia, Angola, Sudan, Ghana, and Morocco), Latin America (Chile,

Argentina, Brazil, Venezuela, Central America, and the Caribbean), South Asia

(Sri Lanka, Bangladesh, and Nepal), the Middle East (Iran and Syria) and Eastern

Europe (Serbia, Turkey, and Macedonia. In the 2010-11 Mahindra entered in Micro

dripp irrigation with the takeover of Epc Industry Ltd, Nasik. Mahindra Tractors

manufactures its products at four plants in India, two in Mainland China, three in

the United States, and one in Australia. It has three major subsidiaries: Mahindra

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USA, Mahindra (China) Tractor Company, and Mahindra Yueda (Yancheng)

Tractor Company (a joint venture with the Jiangsu Yueda Group).

The company has garnered the highest customer satisfaction index (CSI) in the

industry at 88 percent. In its 2009 survey of Asia’s 200 most admired and

innovative companies, the Wall Street Journal named Mahindra & Mahindra one of

the 10 most innovative Indian companies. It earned a 2008 Golden Peacock Award

in the Innovative Product/Services category for its in-house.

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COMAPRISON OF QUALITY STANDARDS OF MAHINDRA AND

MAHINDRA

A study ‘Assessment of Quality of Automobile Services’ was conducted by

VOICE Society with support from Union Ministry of Consumer Affairs,

Government of India, under ‘JAGO GRAHAK JAGO’ campaign. Mahindra ranked

2nd in India in ‘Overall Satisfaction Shown by Consumers’ and number 1 in

recommending the service station to family/friends after the 3rd free service. 100%

respondents said they got response from the company whenever contacted.

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Strategy and risk management:-

In today’s highly dynamic business environment, organizations are at greater risk

from information leakage and corporate governance missteps. The Mahindra

Special Services Group's (MSSG) risk consulting services help you de-risk your

strategic business processes so that you can focus on your value propositions.

M&M wide range of risk consulting services identifies areas where damage can

occur to physical property, people and information. First, identify and value your

assets from people to buildings, hardware, software, and supplies. Then M&M

assess the likelihood of various threats, including acts of war, accidents, and malign

acts, and your level of vulnerability. By comparing the impact of these threats with

the cost of countermeasures, M&M help you determine an acceptable level of risk.

Finally, M&M develop and then help you integrate security measures into your

business processes. M&M follow a human-centric approach to risk management.

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M&M information security management services include educating employees

about its importance and delineate clear steps they can take to safeguard your

critical information assets. M&M physical security advisory services implement

strategies to protect key personnel and their families, organizations, and assets.

M&M also offer you a Governance Directorate to help you achieve high standards

of good governance. Take advantage of M&M technical advisory services and

change management services if you need additional support as you navigate the

ever-changing risk management landscape.

Market Context:-

The soft tops sales, which were Mahindra’s strength, were stagnating. Hard top

vehicles like Sumo and Qualis were garnering market share. The urban market was

showing more potential for vehicle sales and UVs were gaining higher

acceptability in urban cities. The competition was getting tougher with

international UVs entering the market. And also operating in the urban market

meant competing with cars.

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The market was moving from traditional multi utility, non-luxurious vehicles to

luxurious vehicles. M&M had launched Bolero in 2000 to cater to this newly

emerging segment. However, to add to the category’s woes, it declined at the rate

of 3.1 percent in year 2001 over year 2000. UVs as a percentage of the overall

passenger car market were just 16 per cent in 2001. This simply meant that for

attaining the volumes, Scorpio needed to look beyond UVs in terms of competitive

framework to decide on a marketing strategy.

Competitive Context:-

The conventional UV market was too small in size. The UV market in urban

markets was even smaller a percentage. The trend was that the UVs operating in

the urban market were eating into the car share, primarily the cars which operated

in the same price bracket. Qualis was taking market away from midsize cars. With

these facts in place the whole of automobile market was studied in details.

In the arena of cars, A-segment cars, which have been the leaders in terms of

volumes and grew at the rate of 55.2 percent in the year 1999, were having a

reduced growth rate of 34.2 percent in the year 2001. It was found that the fastest

growing segment (growing at the rate of 42.9 per cent) in year 2001 was semi

luxurious cars or B segment cars. And the luxurious car segment i.e. C segment

cars were also growing at a healthy rate of 14.2 percent in that year. However,

super premium cars termed as segment D and E cars, were not growing at such

healthy rates and did not offer volume in terms of number of cars sold.

It was imperative for Scorpio to look beyond UVs. Apart from appealing to a

typically UV buyer, it was also necessary to appeal to a wider target audience -

prospective car buyers belonging to 5 lakh and 5 lakh+ segment. The midsize car

market (C class) which was in the Rs. Five to Seven lakh price bracket had grown

in F’00 at 36 per cent and in F’01 at 22 per cent, and small luxury car segment (B

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class) which was up to Five lakh segment was also showing a healthy growth.

Analysis showed that the volumes in the automobile industry were coming from B

and C segment cars. This meant that the mid size car market was the competitive

arena for Scorpio for it to attain the volume growth and market share it was looking

for. It was decided that the offer had to appeal to segment C buyer and should be

aspirational for segment B buyers. Therefore, an analysis of the offers of all the

segment C cars and the relevant UVs was done. The table below summarises the

analysis:

Interpretations: All the vehicle are feature packed within a price range of Rs. 6-8

Lakhs. All of them, including UVs, are with a proposition of luxury and comfort,

with no differentiation implication. With this analysis it came out clearly that the

positioning of Scorpio has to be such that it should communicate that the vehicle is

better than any of these cars and is a better buy in terms of money.

ConsumerContext:-

Having defined the competitive framework, the next task undertaken was that of

analyzing the consumer. Consumer segments of B and C category car buyers were

analyzed in terms of their expectations from a car, their perceptions about cars and

their relationship. Proprietary techniques of research, of the advertising agency

Interface Communications, like Mind & Mood, ICON and VIP were used to

understand this consumer. The findings were:

* Size matters- big size stands for status

* Consumers seek latest technology

* Imagery but at affordable prices

* The sheer thrill and passion of driving an SUV

* Power of the vehicle makes a statement

* But along with the others, luxury was a very important parameter

* International vehicles define imagery

Þ SUVs like Pajero, Land Cruiser and Prado are seen as urban vehicles for the rich

and famous

Þ Consumers aspire to own these vehicles as the imagery of these vehicles has

become very desirable

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The Key Consumer Insight that emerged from all the consumer analysis and which

was used for strategy development was “Consumers want to consume premium

imagery at prices affordable to them”

Strategic Branding Approach - Identifying the need gap and occupying it

There existed a gap that wasn’t tapped. There was no SUV in the country that the

masses could buy. To make SUVs a mass concept in India - UVs needed to be seen

as comfortable, easy-for-city driving and should have imagery comparable to

international brands.

Therefore, as a strategy it was decided that Scorpio would not take the traditional

UV imagery of tough, off-roading and 4x4. A 4x4 approach would be a very niche

category and would not generate numbers. To appeal to a car buyer, the Scorpio

needed to be seen as a car that offers much more.

A Scorpio had to be seen as providing car-like driving pleasure and at the same

time providing the edge over cars in space, power, style, fuel efficiency, luxury and

comfort. In short, to provide status of a Pajero (international SUV) at the price of

midsize car

The Scorpio product package offered - Superior technology, Dynamic Looks, Car-

like product and great value for the price

Value Proposition for Scorpio:

To capture the identified need -gap, the value proposition of Scorpio was defined as

-

‘Car plus’

Rational benefits: World class vehicle, good looks, car like comfort, great value

Emotional benefits: Ownership experience of thrill, excitement and power

Relational benefits: Young modern, premium, city companion / extension of

lifestyle.

Brand Promise: ‘Luxury of a car. Thrill of an SUV’

This brand positioning addresses the key consumer Insight and the product delivers

the promise. The position is also a unique proposition, which will help the brand

have a distinct image in the consumers’ mind.

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Baseline “Nothing Else Will do”

The baseline captures the essence of the brand, which is superiority and

uncompromising attitude. It also summarises the spirit behind the making of the

Scorpio.

Brand Strategy - Parent brand relationship defining

A study of international brand names was done and a classification of brand names

of midsize cars and SUVs was done into groups. International brand naming trends

and strategies were analysed. New names were generated. These brand names were

researched massively first by qualitative techniques and then by quantitative

techniques.

The name that emerged as most popular, and which was also the most liked name

internally at Mahindra was SCORPIO.

Brand Endorsement Strategy

The relation between Scorpio and the mother brand Mahindra was also deliberated

upon. The strategy chosen for Brand Endorsement was - Scorpio from Mahindra -

shadow endorsement, one which does not shout “Mahindra.”

The Mahindra brand image was not modern and young. There was a need to create

a strong distinct modern brand. Hence Mahindra as a Masterbrand could not

contribute towards enhancing the Value Proposition. Yet Mahindra had to provide

source reassurance. Also the distribution would be through Mahindra dealerships.

Hence it became a shadow endorser.

Advertising and Promotions Strategy

The creative strategy was to drive home the ‘Car Plus’ positioning forward. There

was a need to leverage on product strengths. And a need to establish car plus story.

Hence the product was to be the hero in all communications

The tone and manner was to help associate the brand with the modern and urban

lifestyle. The TVCs as well as the press still-shots were shot in Australia to provide

an international city feel. This brought in the international, premium, up-market

association for the brand.

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Media Strategy

Role of Media

*Dramatic and high impact launch

* High visibility

* Push brand image even by the media vehicle

Building impact through multiple-media

* PR, Mass Media, Direct Marketing, Events

Public Relations

Pre-launch excitement and buzz was created by a full blown PR program. Media

coverage on the IDAM process, the people behind the Scorpio, the obsession, the

world class technology, etc set the tone for the hyped up launch. PR was also the

first tool used for launching the Scorpio. The coverage of the launch was massive.

It got four cover stories

Mass Media

‘While the media targets would be achieved through the right selection of the

media mix, the Scorpio media posture was to ensure that Scorpio was present on

the decided media but ‘with a difference.’ Scorpio would use media innovations to

create differentiation on the traditional media and do things in a ‘bigger and better’

manner.

Customer Relationship Management (CRM)

CRM as a tool was used to create positive word-of-mouth, to monitor customer

experiences and generate referrals. A series of CRM activities were implemented

with regular direct communication, events and customer research. The CRM plan

included a welcome Pack on filling up Scorpio Club (Top Gear) form, satisfaction

surveys, Events, Festive offers, Rewards Program, etc.

Pricing Strategy: to be a premium brand yet having universal appeal

Scorpio was to compete with the midsize cars like Hyundai Accent, Ford Ikon,

Opel Corsa, Maruti Suzuki Esteem on the one side and UVs like Toyota Qualis,

Tata Safari and the Tata Sumo on the other. Scorpio adopted the penetrative pricing

strategy positioned in the psychological price barrier of Rs. 5 -7 Lakhs.

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Distribution Strategy - Serve less markets at a time but serve them well

Since the Scorpio was targetted at an urban clientele it needed a stronger ditribution

presence in Metros and urban areas. Hence, the distribution channel had to focus on

providing an appealing experience for modern car buyers and on offering

international standards of auto retail.

Phased Launch

The Scorpio was launched in a phased manner - first in Metros Mumbai, Delhi,

Bangalore, Chennai. Twenty cities were included over a period of 4 months and

within a year 50 cities were covered. This ensured attention to main markets and to

ensure that initial production of the vehicle could match demand. Dealerships were

revamped prior to launch in a particular city.

Showroom Experience

The showroom revamp was centred around the intention to provide a uniform

customer experience at all the touch points and to provide the customer with a

unique “experience” and not just a “product”. Therefore the back office would

remain outside the customer’s line of vision because the customer would be

concerned with the product and not with the paperwork.

Infrastructure

Thirty-five showrooms across the country were redone entirely with the same look

and identity and a décor built around movement, technology and sportiness. The

theme focussed on giving the customer a memorable experience.

Response - The strategy delivered

Volumes and Market Shares: Scorpio achieved its targets on market share and

achieved a volume of 12000 vehicles in the first 9 months of its launch.

Image: Scorpio advertising had a very high recall for the Mahindra brand (Exhibit

3) as well as for the product (Exhibit 4). Apart from this, advertising actually

positioned Scorpio as a powerful vehicle with a sporty look, solidly built with good

cargo capacity amongst the premium car consumers and sports utility vehicle

consumers.

Overall response to the Scorpio was stupendous. The product was well received

across the country and got rave reviews across media. More importantly the

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product and the strategy delivered in terms of the various objectives set before

launch. Footfalls in the showrooms had been massive and demand had far exceeded

supply of vehicles with a waiting period of three months.

Scorpio Brand Recall

In the SUV/MUV segment, Scorpio has the second-largest awareness and has

emerged as a strong brand in the C & sub-C car segment, however as compared to

Qualis, it needed higher recall. Scorpio advertising had been able to create a good

impression on appearance and styling of the vehicle.

Scorpio buyer profile

Scorpio managed to pull out customers from the C segment of vehicles. The

product, communication and the retail experience of the Scorpio passed the

stringent test of luxury car buyers and the buyer profile was exactly as per the

target profile. The strategy delivered with more and more small and midsize car

buyers choosing the Scorpio over the others.

Awards

The Scorpio was awarded various awards from various bodies

Mahindra achieved the objectives it set out to achieve. M&M has more than 39 per

cent of market share in hard tops, sold 11800 Scorpio in first nine months of

operation and due to this campaign, Mahindra image improved.

Scorpio Impact

Scorpio was launched on June 19, 2002. At that time Mahindra was losing market

share and the share prices were also at an all time low at around Rs. 100. The

Mahindra share of business was largely from the semi-urban and rural market of

India and the markets where Mahindra was strong were stagnating.

With the launch of Scorpio, things started looking up for Mahindra. There was an

improvement in the bottom line as well as the return to the shareholder. The

revenue for M&M Auto Sector increased from Rs. 1827 Cr. in F 02 to Rs. 2511 Cr.

in F 03, a growth of 37 per cent. The profits before Interest and Tax (PBIT) too

zoomed up from Rs. 102 Cr. in F 02 to Rs. 147 Cr. in F 03, an increase of 43 per

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cent. In F04 the scenario has further improved. The half-yearly results show a

growth of 54 per cent in revenue and 218 per cent increase in PBIT. The share

prices have outperformed the Sensex and Share prices have zoomed from Rs. 100

to Rs. 400 by December ‘03.

As regards Mahindra image in the customers mind, the post launch study

conducted gave the following improvements (Brand track Study - Nov 2002 -

IMRB):

*The Mahindra saliency scores improved by 27 points among MUV/ SUV owners

and by 29 points among all car-owners.

*The overall positive opinion about Mahindra also moved up by 18per cent among

MUV/ SUV owners and by 11per cent among all car owners.

*Mahindra Scorpio has fared excellently in overall opinion as against its key

competitors.

Future Directions - World class product goes global

Having done well in the domestic market, Mahindra and Mahindra is now moving

forward on its path to become a global niche player. i.e, it is stretching its activities

in foreign markets. The company is in the process of negotiating joint ventures in

markets like Spain, Italy, South Africa, Indonesia, Russia, Equador for marketing

of Scorpio.

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MARKET ENVIRONMENT

PEST Analysis:

Political factors:

The automotive and farm equipment industry is closely linked with the policies of

the government and hence we see both the industries dominated by players with

political powers all over the world. The automotive industry depends on various

regulations imposed by the government like emission of co2 limit, or how the

Indian government allowing 100% investment of foreign equity hassled to increase

in competition and brought in development in infrastructure in technology. The

government’s investment on infrastructure like roads and bridges affects the

automobile sales. Also the governments import/export regulations play an

important role for the globalisation of the companies. while the policies of the

government in agriculture sector is vital to the farm equipment industry. The

policies of the Indian government have mostly been conducive to growth of both

automotive and farm equipment industry.

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Economic factors:

Both the automotive and farm equipment (related to agricultural industry)

industries play an important role in the country’s economic progress and also their

progress is dependent on the progress of the economy. Recent economic conditions

have lea to flat-demand of automobiles all over the world although the farm

equipment industry continues to grow. With the country’s GDP growth being

projected around 6.5-7.5 % it will be challenge for the automotive industry to

maintain its growth of 8-10 % over the previous years and even more difficult to

add on it. Also the growth the manufacturing industry (steel, plastic, glass) depends

on these industries growth. Slow growth would result in wastage to economic

resources.

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Social Factors:

Automotive industry plays an important role in the employment levels of the

country as it is responsible for employment of millions directly and indirectly. Also

it leads to increase in standard of living of the people as having a bike or car is

associated with the social status of families. The Indian customers are well

informed and price sensitive with preference given to low cost and fuel efficient

cars. Around half of the country’s population is involved in agricultural activities

and hence it is important for the farm equipment industry to add value to their

activities. Environment factors like increase in pollution and global warming also

have an impact on the two industries.

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Technological Factors:

Innovation being one of the main criteria of growth in both the industries,

technology plays a very important role indeed. Hence, we see millions being spent

on finding new technologies by many companies to ensure progress. Also the entry

of many foreign competitors like BMW have lead to exposure for customers to new

level of technologically developed cars leading to pressure on the local players to

stay in tune with the technological developments.

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Passenger Vehicle Analysis Fiscal Year 2012-13

Overview automobile Industry:- Overall Indian Automobile Industry has shown

2.61% growth in FY 2012-13 compare to last FY 2011-12. Production and

Domestic sales has registered growth of 1.20% and 2.61%, however export is

negative growth due to negative global environment and fluctuation.

Most of the automotive players have plan for expending their activities in India

including new product launches. Indian automotive industry contribute 5-6% in

GDP and more than 15 million man power directly associate with auto industry.

However the overall performance is not giving good vibes for Industry. Indian

Govt should take some action for stabling fundamental sentiments of economy.

Passenger Vehicle Segment: One of the hot spot in world automotive industry is

Indian car market. Indian car industry is going thru turbulent times in now. Car

sales is down by more than 6% in FY 2012-13 compare to last year of FY 2011-12.

The main reasons are high interest rates, fuel price, high inflation, low movement

in other sectors etc. Utility vehicle segment is having maximum growth in this

segment @ 52%. Ertiga has put successful foot print this segment. This vehicle is

giving good competition to Innova. SUV segment also grown due to its fuel

economy and price combination became top choice for larger families.

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Maruti has increased market share due its better performance in UV segment

compare to FY 2011-12. Tata is still third largest car manufacture with marker

share of 15%. Tata has de-growth of 15% which is very significant. Tata need to

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revive its product position and brand value which play important role in passenger

segment.

Segment Analysis:- Tata Nano can be a good case study for product planning.

Only advertising cannot increase sales. They must fulfill all parameter and clear

picture of this target segment.

Even export came down from 3,462 units to 166 units, recording a de-growth of -

95% in FY 2012-13. ACG analyst team saw that the main reason is of heavy

marketing of Nano, Tata shall think about reducing the marketing cost, make it

more competitive and pass it the customers.

Economy car segment:- It is biggest segment in car industry of around 8-9 lacs

units. Maruti and Hyundai is dominating this segment. Fiat can be good example

for inconsistent strategy. There could be big barrier to be become successful in

market. Fiat India is having one of the quality product in its segment. Fiat is

targeting a modest 1% market share in 2013, with 100 exclusive Fiat showrooms

expected to be operational by the end of the 2013.

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ACG primary research shows that most of the Fiat customers are satisfied with its

product quality but they have dissatisfaction over after sales service. ACG team has

done this study to macro level to prepare strategy paper.

Sales and Celebrity:- Nissan Micra is one the companies who use celebrity to

increase its sales. Ranbir Kapoor is the brand ambassador for Micra. This is a miss

match between this segment car and branding strategy of Nissan.

SUV Segment: Compact SUV – Game Changer:- Fastest growing segment of

FY 2012-13. Its segment share is around more than 20% & growing by around 7%

in FY 2012-13. There is a perceptible shift from Mid segment sedans to SUV

segment.

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Duster manufacture/assemble at the plants in Pitesti (Romania), Moscow (Russia),

Curitiba (Brazil) and Envigado (Colombia) and in Chennai. 4X2 and 4X4 version

are available globally. For South America it is available with executive cabin

design and colors where in India there is separate AC arrangement for rear

compartment.

Renault Duster has sold 39,188 units in India in FY 2012-13. Globally its sale was

256,553 units out of which 98,498 units sold in Europe. In Europe there is de

growth of this model but rest of the world it is very well accepted. Ford is also

launching its EcoSports SUV in this segment.

Luxury Car segment: Audi Beats BMW to Pole Position:- India is rapidly

emerging as a key market for global luxury car brands. All premium brands has

now having their show rooms in India. Audi, BMW, JLR, Volvo Cars and Porsche

are top performer in this segment. Mercedes Benz is still struggling to get its space

in this segment. Tata’s JLR Range Rover and Jaguar XF Sportbrake has good

enough support to have mix product portfolio to increase its sales globally.

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Significantly Audi beats BMW for top spot in luxury car segment. According to

the ‘ACG Brand Image Study’ its the strong brand value that Audi imposed into the

Indian market aided them in achieving this. And there is every chance of the gap

between the two German giants to get widen in the near future. Tata Jaguar and

Land rover has shown strong growth in FY 2012-12 with 101% growth rate.

Outlook:

ACG saw drastic changes in market this year. We are expecting to have some

market correction and growth could be around 2-3% in FY 2013-14. ACG do

forecast every qtr to qtr. We will keep watching all factors which can influence car

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industry. ACG like to see some solid initiatives from the side of Indian Gov. to

keep the India Car Market more attractive.

2 Wheeler Market Environment

Two wheeler sales in India for Q1 FY-2013-14 decreased by 0.82% whereas

scooter sales up by 14.30%:- The cummulative sales of two wheelers in India for

the first quarter of fy 2013-14 stood at 3,490,677 units as against 3,519,555 units in

q1 fy 2012-13 registering a 0.82% decline.

Hero is the market leader in Indian two wheeler segment, but witnessed a 4.24%

reduction in their sales. While Honda had marked a 14.24% rise in their sales.

Notable increment had been shown by Yamaha at 36.05% and Royal Enfield at

46.53%. Piaggio registered 149.75% increase in sales with 12,280 units sold during

q1 fy 2013-14 as against 4917 units during same period of previous financial

year. The strikes at Chakan Plant of Bajaj has adversely affected their two wheeler

production and they marked 7.57% decline in sales.

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Hero also lost some market share and now stay with 43.77% while Honda’s share

had risen to 20.36.

Motorcycles

The motorcycle segment had witnessed a 3.98% de-growth during the period q1 fy

2013-14 with 2,524,316 units sold as against 2,628,975 units for q1 fy 2012-13.

Market leader Hero had their sales cut down by 8.21% while second most selling

brand Bajaj got their sales decreased by 7.57%. Among the positives Honda had

registered 20.58% growth in sales, while Royal Enfield and Harley Davidson had

also improved their sales by 46.53% and 22.70% respectively.

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Hero contributes 54.06% of sales in motorcycle segment, while Bajaj auto has

22.65% share. Improvement has been made by Honda in this segment and raised

their share in this segment to 12.48% in q1 fy 2013-13 from 9.94% in q1 fy 2012-

13.

Scooter Segment

The Scooter segment had seen their sales grow by 14.3% during the period q1 fy

2013-14 with 785,591 units sold as against 687,333 units in q1 fy 2012-13.

Segment leader Honda registered 9.65% growth while Hero had earned an

impressive 49.98% growth in sales. The segment also witnessed Mahindra sales got

decade by 51.44%.

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Honda witnessed their share came down to 50.37% in Scooter segment, while Hero

up their market share to 20.80%.

Mopeds

The sales of TVS Mopeds have decreased by 11.06% in q1 fy 2013-14. TVS sold

180,770 units during the period as against 203,247 units in q1 fy 2012-13.

Source: SIAM

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VALUE CHAIN ANALYSIS:-

Mahindra and Mahindra have strong position in the Indian commercial taxi market.

People mostly buy’s it because it has good performance in extreme condition as

well.

STP:-

Segments:-

Mahindra and Mahindra has complete range of SUV’s and Sedan segment

for attracting their target segments.

Automobiles can be classified based on different criteria. Society of Indian

Automobile Manufacturers (SIAM) classifies automobiles based on their length. As

per this model, cars are classified into different segments such as A1, A2 etc.

Segment Type Length

A1 Mini Upto 3400mm

A2 Compact 3401-4000mm

A3 Midsize 4001-4500mm

A4 Executive 4501-4700mm

A5 Premium 4701-5000mm

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A6 Luxary Above 5000mm

Passenger car segment in India

Source : SIAM

We can also classify Indian passenger cars into different segments based on price

and functionality.

Segment Price

Economy Less than INR 5,00,000

Premium INR 5,00,000 – 15,00,000

Super-premium Above INR 15,00,000

Indian car segment based on price.

Target Group:-

Mahindra and Mahindra is mainly targeting upper middles class young

executive who prefer a better lifestyle for them. They are mainly the professionals

and businessman. Mahindra and Mahindra has also the strong rural reach through

it’s exclusive showrooms.

They have find out many significant factors that customer take into account

while making purchase decisions. The various factors are as follows:-

Factors

Price

Mileage

Styling/exterior

Spaciousness

Availability of spares

Interiors

Reliability/Quality

Brand Name

Availability of Financial Schemes

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Positioning

Mahindra and Mahindra to use “RISE” as new brand positioning. Keeping with its

global ambition, homegrown farm equipment-to-auto group Mahindra and

Mahindra today said it will embark on a new brand positioning to project a singular

voice for various entities under its umbrella.

The group, which has decided to use 'Rise' as the new brand position, said it will be

spending Rs 120 crore in the next three years towards promoting the new initiative.

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PRODUCT MIX

Products and Services:-

In 1947, we introduced India to the utility vehicle. More

than 65 years later, we're still India's premier utility vehicle (UV) company, but

we've also grown quite a bit. In addition to making ground-breaking UVs like the

Scorpio and Bolero, Mahindra offers cars, pickups, and commercial vehicles that

are rugged, reliable, environmentally friendly, and fuel-efficient. Our global

presence means you can find Mahindra vehicles on the roads-both paved and

unpaved of Australia, Europe, Latin America, Malaysia, South Korea, and South

Africa. And we're seeking out new terrain every day.

Mahindra is also there for you through the construction of excellent components,

provision of spares, and commitment to superior service. Our automotive

businesses cover all your transportation needs thanks to strategic synergies between

our expertise in design, manufacturing, and service.

Two Wheeler’s:-

We entered the Two Wheeler industry in 2008. We’ve developed rapidly

since then by focusing on brand-building via new product development guided by

consumer insights, strategic partnerships, service orientation, and building scale.

Within eight months of entering the industry, we launched a portfolio of Power

Scooters to critical acclaim in September 2009. Less than a year later, our Power

Scooters had captured a double digit market share. In 2011 Mahindra became the

first Indian two-wheeler manufacturer to enter the Moto Grand Prix

Championships, showcasing our engineering and technology expertise on a

platform where the best in the world compete. We aim to grow into a major player

in the Indian Two Wheeler industry with a robust presence in all product segments.

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Company’s under Two wheeler:-

� Mahindra Two Wheelers

� Mahindra Racing

Products:-

� Duro-DZ

� Flyte

� Kine

� Rodeo-RZ

Duro-DZ:-

A solid scooter designed specifically for tough Indian roads.

A powerful 125 cc engine provides better instant pick-up and multi-terrain

acceleration, making it easier for you to carry load, even on steep inclines and in

tough road conditions. The Dual Curve Digital Ignition (DCDI) System delivers a

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mileage higher than other 125 cc scooters. Greater ground clearance enables

manoeuvrability over speed breakers with ease and comfort. The longer wheelbase

and improved braking system offer you better safety & stability on the road.

Flyte:-

Affordable and convenient, the Flyte grants you the freedom to go where you want,

when you want.

The Flyte is designed for convenience, comfort, and style. We added a specially

designed fuel tank inlet on the front, so you can stay seated while you refuel.

Everything from books to clothes to shopping bags are easy to fit and easy to find

in the largest-ever 22 liter dual compartment. And the four-in-one key system

multitasks to start the ignition, open the fuel lock, lock the handle, and prevent

theft.

Kine:-

The Kine brings young drivers independence. Zip to class and to your friends’

houses in style with plenty of space for your backpack or kit bag under the

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seat. Sleek grab rails make it easy to bring along a friend, and the cushy seating

keeps you both comfortable.

Rodeo-RZ:-

The Rodeo-RZ offers superior performance. Its powerful 125 cc, 4-stroke engine

delivers a rush on the open road or in traffic. It’s telescopic suspension smoothes

rough roads. Its supercharged battery gives you a clearer horn, brighter headlamp,

and instant startup. And it’s packed with features to ensure your comfort and style.

ALFA

Price:- 1.4L-1.6L

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The Alfa is a three wheeler goods carrier designed to make the loading,

transportation, and unloading of small cargos easier.

GIO

PRICE :- RS. 1.65-1.68L

The Gio for intra-city cargo movers who need a compact, hardy truck that can carry

small quantities of goods over rough roads. Through its reliability, function-

specific size, and superior driving experience, the Gio makes hard work easier for

the drivers who depend on it every day.

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C. TRUCK

PRICE- RS.15L

Indian roads can be more than a little challenging thanks to wide variation in

terrain, inclement weather, and a large percentage of unpaved or unmaintained

routes. To succeed, you need a transportation solution that can handle it all. We

designed Mahindra trucks from the ground-up in India to excel in Indian

conditions, so that you have a more than able partner in your business.

D. BOLERO MAXI TRUCK

Price: Rs 4,08,720 - Rs 4,80,647

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The Bolero Maxi Truck has the clean lines and macho grille of the Bolero utility

vehicle, and the power and cargo space of a hard-working truck. It lifts your

livelihood—and your lifestyle.

E. GENIO

Rs. 5,06,000

We built the Genio to satisfy small and medium business transportation needs.

Built for performance, it commands the style of a utility vehicle and the comfort of

a car to make transporting goods more efficient and more relaxed. And with eye-

catching metallic colors and an aggressive grill and bumper, the Genio makes a

statement.

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F. LOADKING

Rs. 6,73,865/-

Our range of Loadking trucks offers the right transportation solution for any

business. Need to transport high-volume perishables? Try the Long-Wheelbase

4tyre. Moving big loads like boulders, cement, or sand? Use the Sherpa

Tipper. We even have a model that runs on compressed natural gas (CNG) to help

you fight global warming and fuel costs.

G. MAXIMO

Rs. 3,25,400. to Rs. 3,42,896.

The Maxximo is the most technologically advanced minitruck on the Indian roads

today. Powered by the world’s first two-cylinder CRDe engine and equipped with

double overhead camshafts and four valves per cylinder, it’s built to perform.

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H. TOURIST BUSES

PRICE – 7L to 14L

Every Tourist’s two-tone, high-back seats are well spaced out to give you plenty of

legroom, and the interior is bright and spacious. We focused on the driver’s

comfort too, putting in a cable-type gearshift with a shorter gear and an adjustable

steering column.

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PERSONEL VECHICLES

BOLERO

Rs. 5,65,566

Creating the Bolero meant challenging the existing perception of utility vehicles

(UVs). Because of their toughness, the common perception is that UVs lack

comfort and style. With the Bolero, we strive to deliver the ruggedness people

expect in a UV with the driving pleasure of a car, answering the need for function

with style.

E2O

Rs. 5.95 - 6.25 Lakhs

Designed for urban use, this electric car brings clean transportation options to any

lifestyle. You can carve through city traffic easily, the green way. We’ll even send

you monthly updates on your carbon consumption with tips on how to drive more

efficiently.

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Striking, convenient, and comfortable, the e2o is the successor to the

REVAi (known in the UK as the G-Wiz) which was amongst the world’s best-

selling electric vehicles. With seating for four adults and two children, it presents a

convenient transportation solution and is perfect for city driving. It operates with

maintenance free Lithium-ion batteries delivering 100 km per charge, and reaching

a top speed of over 80 km/h.

SCORPIO

Rs 7.94 - 12.56 Lakhs

The Scorpio (known in Europe as the Goa) we started with a clean sheet of paper

and just one thing in mind-our customers. Your needs became its features, and your

destinations its motivation.

The Scorpio is built around a sophisticated

all-original frame that is rugged yet forgiving. That gives you the flexibility to take

Scorpio anywhere-from urban alleyways to glass-smooth highways to boulder-

strewn trails in confidence and comfort.

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THAR

Rs.7,08,649

The Thar has been more than 60 years in the making. Mahindra built its first utility

vehicle in 1947, when it assembled completely knocked down (CKD) jeeps in

India. Rough, uncertain driving conditions across the country led Mahindra to

design its own powerful, handle-anything UV—the MM540.

VERITO

PRICE- RS. 5,35,053 to RS. 7,23,038

Bold straight lines and subtle curves clearly affirm its powerful stance. The

muscular side cladding, rear spoiler and roof rails bear testimony to the car’s

Mahindra lineage. The sparkle clear head lamps, chrome rear appliqué and fog

lamps add a touch of glamour. Inside, the Verito flaunts a tastefully designed sleek

control panel with a wood finish fascia.

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XYLO

RS. 7,22,833 to RS. 10,45,330

The all-new Xylo: 50 updates, 5 variants, 3 engine options.

The Xylo is a sleek multi-utility vehicle (MUV) that offers tons of space, style,

and features. You can literally tell this car what to do: the pioneering Voice

Command Technology lets you control over 30 actions, just by speaking.

The striking front grill and chrome accents make the

Xylo a statement, and the cozy interior makes it a home away from home. The

seats offer advanced lumbar support, and the flatbed front seats recline fully to

form a horizontal bed. Foldout trays on the backs of the front seats make a quick

snack or meal-on-the-go easy and less messy. Mobile charging points and courtesy

lamps transform the Xylo into a moving office. We’ve also attended to details like

express power windows, tilt steering, and easy-to-adjust driver seats.

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ACTYON

Rs 8.00 L - 10.00 L

With a dynamic and unique style that features simple and refined lines as well as a

powerful diesel engine and four wheel drive system, the Actyon offers the style of

a sports coupe and the utility of an SUV.

ACTYON SPORTS

Price N/A

Take the best of the Actyon's style and fuse it with a pickup truck's practicality.

The result? The Actyon Sports-a Sports Utility Truck that’s ready to handle any

challenge you throw at it.The first multi-purpose SUT in Korea, the Actyon Sports

fits seamlessly into an urban lifestyle with an innovative design that suits both

work and personal needs.

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CHAIRMAN W.

Price N/A

The Chairman W burst onto the scene in 2008, it strengthened the impact the

Chairman line has had on the Korean luxury car market since 1997.

With its smooth lines, exciting interior features, and superior

handling, the Chairman W brings safety and style to a new level. The Benz 7-speed

automatic transmission delivers enhanced shifting comfort, fuel economy, and an

acceleration boost, while its electronic stability program reduces risk factors on the

road. And with a sophisticated electric parking brake system, active cruise control,

and a 10-airbag safety system, you can rest assured that the most advanced

technology is at work protecting you.

KORANDO

Rs 15 lakh

The sturdy space of an SUV. The style of

an elite European vehicle. It’s no wonder the Korando has long led Korea’s SUV

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market—and even holds the Guinness Book of World Records title as Korea’s

longest-surviving brand.

This classy utility vehicle was jointly designed and developed in

Europe by renowned stylist Giorgetto Giugiaro, who married a modern, stylish

SUV shape with the rugged appeal at the heart of Ssangyong Motor Company’s

style. Its monocoque body is a first for a Ssangyong SUV, and ensures it’s both

lighter and sturdier than its counterparts.

KYRON

Price N/A

The varied needs of today's customers were at the forefront of the Kyron’s new

design, which made its debut in January 2011. Today, this mid-sized, high

performance SUV is more eco-friendly, more convenient, and more dynamically

styled than ever.

Even before its redesign, the Kyron enjoyed a worldwide

reputation as one of the best SUVs in the industry renowned for their convenience,

style, off-road performance, and pricing.

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REXTON

Rs 18.69- 20.92*lakh

The Rexton for a spin and you’ll immediately understand why it is Ssangyong

Motor Company’s showcase SUV. This powerful SUV offers the best combination

of performance, fuel economy, comfort, versatility, and safety.

A host of advanced features like the 8-way electrically adjustable driver's

seat with memory settings, touch-screen infotainment system with maps, sunroof,

automatic climate control, rain sensors and auto headlamps make your journey

comfortable.

RODIUS

Price Rs. 15 lakh

The New Rodius is Korea’s first Multi-Purpose Vehicle. It combines the best from

passenger vehicles, SUVs, and minivans with some of the most popular

technologies found in our Chairman and Rexton models.

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XUV 500

Price 11.50 lakh to 14.50 lakh

The XUV 500 knows no boundaries. Mahindra’s first global SUV platform is here.

Designed with inputs from customers across the world, it is unmatched in terms of

style, performance, technology, safety and comfort – a truly complete driving

experience.

Bold lines trace the chiselled, aerodynamic body of the XUV

500 with static-bending projector headlamps, LED parking lamps and racing-

inspired twin exhaust give the vehicle both a ferocious and sophisticated look,

making it a striking presence on road.

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New Launch expected:-

L . QUANTO

Estimate price RS. 5.98 Lakh to Rs. 7.49 Lakh

Designed for the modern family, the Mahindra Quanto fuses the convenience and

practicality of a hatchback, with the space and comfort of an SUV.

A new breed of compact SUV, the Quanto is the only vehicle with 5 + 2 seating in

the sub-4m category giving it best-in-class interior space. Need a bigger boot? The

5+2 seating is adaptable to the varying needs of the modern family, and the third

row of seats folds to make more space than ever before.

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M. Mahindra compact XUV500 (Expected in October 2013)

Expected Price : Rs.6.00 L – 7.50 L

The XUV500 has been a massive success for Mahindra however now Mahindra

plans to expand and cash in on its popularity and might bring in a mini XUV500!

Yes the XUV500 may be chopped and in a bid to get more sales the compact

XUV500 could be soon a reality. The Quanto has not been a big success primarily

because it’s not exactly great looking and not that much different from the Xylo.

Defense Products:-

India's national security challenges are varied and complex, ranging from contested

borders to regional peacekeeping to domestic unrest and natural disasters. As we

become an economic and political leader in Southeast Asia and across the globe,

we need better defense solutions to support us in our growing roles. Since the late

1990s, India has begun a systematic modernization and upgrade of its military

equipment. A key component of this push is the indigenization of our defense

supplies.

We've been involved with defense systems since 1947 when a licensing agreement

allowed us to become importers, assemblers, and then adapters of the iconic Willys

Jeeps used in WWII. From there, we moved into designing and constructing our

own line of armored vehicles to become the largest private sector supplier to the

government. We've now expanded into defense systems like sea mines,

surveillance solutions, weapons, ammunition, and more. As India improves its

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national security capabilities, we want to be there providing cutting-edge

technology based on decades of experience and care.

Our expertise, manufacturing strengths, and cost-efficient production also make

our products useful to foreign governments and security organizations. We partner

with several countries to bring them a range of defense solutions for use by police

forces, the Army, and the Navy.

Companies Under Defense Auto Sector:-

� Mahindra and Mahindra Defence Division

� Defence Land System

Products:- They have products for Land as well as for Sea.

For land they have various products such as:-

� Axe

� Marksman

� Mine Protected Vehicle

� Rakshak

For Sea they have various products such as:-

� Sea Mines

� Torpedo Decoy Launchers

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Mahindra Axe:-

The Mahindra Axe Light Strike Vehicle is a high mobility combat vehicle designed

for the Indian Army and the Special Forces of foreign armies. Its 140 HP, four-

cylinder diesel engine and Mercedes-Benz transmission deliver high performance

in the roughest situations. Lightweight and high-payload, the Axe can carry six

crew with full battle loads.

Marksman:-

Mahindra designed the Marksman to protect paramilitary and police forces in

counterterrorist and standard operations. The first of its kind in India, the

Marksman is a capsule-based, light bulletproof vehicle that carries a driver, co-

driver, and four personnel.

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Mine Protected Vehicle:-

The Mine Protected Vehicle India (MPVI) is the first product designed and

manufactured by Defence Land Systems India, the then joint venture between

Mahindra & Mahindra and BAE Systems. Designed specifically to meet Indian

security challenges and terrain, the MPVI supports the Indian armed and

paramilitary forces in their remote security procedures. With a rugged 230 HP

engine and a 6x6 transmission system, the MPVI is ready for offroading.

Rakshak:-

The Rakshak is a heavy-duty bulletproof vehicle with a powerful four cylinder, 61

HP engine. The Rakshak’s composite armor stops front, side, and rear attacks with

7.62mm bullets from a distance of 10m, and its roof protects the passenger

compartment from a 45 degree attack from 10m. An optional light machine gun

comes with a protection shield in the front, providing a firing range of 120

degrees. A ballistic carpet to provide 98 percent underbelly protection from

shrapnel grenades can be installed on request.

Today the Rakshak is serving the Indian Army, police and

paramilitary forces - saving lives in Jammu and Kashmir, North-Eastern States,

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Delhi, Andhra Pradesh and Jharkhand. It’s also used by the Paramilitary and

Security forces of Guyana and Nepal.

Farm Equipment:-

They began manufacturing tractors in the early 1960s for the Indian

market. Nearly 50 years later, we are the number one tractor company in the world

(by volume) with annual sales above 200,000 and over 2.1 million tractors sold to

date. Our products are making farms more prosperous in more than forty countries

on six continents. Following our vision of Farm-Tech Prosperity, we’ve also

expanded into farm-support services, including agri-mechanization solutions under

Mahindra AppliTrac; seeds, crop protection, as well as market linkages,

distribution, agri-support information and counseling through

the Samriddhi Initiative.

Through this network of services, we aim to empower the rural farmer and

transform rural productivity, income, and living standards. We want to improve

farm lifestyles by making hard work easier, increasing yields, and increasing

returns. All our tractor brands, ranging from the 15 HP engine to 85 HP, have been

designed in close communication with farmers about their day to day tractor usage

and farming practices. From low cost tractors that cater to farmers with marginal

landholdings, to higher performance tractors with superior features, we've

revolutionised the farm equipment space. Our farm equipment and services provide

a comprehensive support system to help farmers prosper.

Coupled with this is a comprehensive agri-support system ranging from water-

management to crop solutions— enabling farmers to rise beyond their current

realm of possibility. Our continous dedication in putting the farmer at the center of

our products and services has led us be the market leader in India for nearly three

decades, with a market share above 40 percent.

This close relationship to Indian agricultural development has given us extensive

expertise in designing and manufacturing farm equipment in response to local

conditions, enabling us to enter foreign markets across the world. Today, we have

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footprints in the United States, China, Australia, New Zealand, Africa (Nigeria,

Mali, Chad, Gambia, Angola, Sudan, Ghana, Morocco), Latin America (Chile,

Argentina, Brazil, Venezuela, Central America and the Caribbean), South Asia (Sri

Lanka, Bangladesh, Nepal), the Middle East (Iran, Syria) and Eastern Europe

(Serbia, Turkey, Macedonia).

Company’s under Farm Equipment:-

� Mahindra (China) Tractor Company

� Mahindra USA Inc

� Mahindra Yueda (Yangcheng) Tractor Company

� Mahindra and Mahindra-Farm Equipment Division

Products Under Farm:-

� Arjun

� Bhoomiputra

� Sarpanch

� Shaan

� Yuvraj

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Arjun:-

The Arjun will take your farm from prosperity to plenty. With its high-performance

engine, technological superiority, and flashy looks, the Arjun dominates in the top-

end category of 40+ HP tractors in India.

The most advanced technology in India makes the Arjun an outstanding

performer. Thanks to the Synchrotec transmission, you can change gears easily

even when you’re in motion. Dual acting balanced power steering ensures easy

maneuverability in any operation conditions. Hi-Tec hydraulics ensure smooth and

precise operation. And the Lubritech braking system is so powerful it can stop the

tractor even with 25T of loaded trolleys on a steep gradient.

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Bhoomiputra:-

Exceptional reliability and value for money make the Bhoomiputra our best-selling

tractor, accounting for almost 60 percent of all tractor sales. It brings you robust

style, strength, better pick-up, and high fuel efficiency—and it’s easy to

operate. Highly dependable and low maintenance, the Bhoomiputra will transform

your farm’s productivity for years to come.

The Bhoomiputra comes in five models ranging from 25 HP to 45 HP so you can

choose exactly the tractor you need. Our engine technology monitors load and rpm

to determine the optimal amount of fuel for each task, bringing you savings on fuel

costs and gains in performance. And with a low rpm of 1900, your engine suffers

less wear and tear so it can keep working for you longer.

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Sarpanch:-

Ushering in a new era of turbo technology, the Sarpanch sets a new pace for

agriculture.

Available in 39 HP to 52 HP, the Sarpanch's three-cylinder turbo engine brings

you greater power, higher speed, and enhanced productivity. The full constant

mesh transmission lets you shift gears in motion so you never have to slow

down. The Hi-Tec hydraulic system gives you smooth operating control and the

Quick Lift button lets you quickly lift and drop loads without fatigue. And the

multi-disc brakes are immersed in oil to encourage top performance and low

maintenance.

The Sarpanch upgrades your style with new, modern lines and a removable front

grille. Take a look at the illuminated gauges on the dashboard, bright halogen

headlamps, and comfortable seating. With turbo power and style, the Sarpanch

helps you get more done every day.

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Shaan:-

The Shaan is a modern multi-utility tractor with the ideal combination of looks and

performance that will help you with more than just agriculture—its multi-utility

design will help you put your entrepreneurial ideas into practice. We’ve built in a

trolley with a payload of 750 kg so you can use the Shaan for a range of activities

to suit your ambitions.

With a top speed of 40 kmph and a 23.5 HP engine, the Shaan is fast enough to be

not only a farming tractor, but also a goods or people carrier. It’s got versatile style

too, with a conventional tractor look coupled with chic features including a soft-top

canopy and windscreen with wipers. Its comfortable seat and car-style clutch,

accelerator, and gears will have you speeding through your work.

In 2007, the Shaan was recognized with the American Society for Agricultural &

Biological Engineers Award for being one of the 50 Outstanding Innovations of the

Year. From agriculture to transportation, the Shaan is ready to support you in

every business activity.

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Yuvraj:-

The Yuvraj 215’s low cost of ownership and best-in-class fuel efficiency is

bringing mechanization opportunities to farmers with small landholdings across

India and revolutionizing earnings capabilities.

We designed the Yuvraj 215 for small farm operations. With one cylinder and 15

HP, the Yuvraj 215 is compact and easy to operate. We built it for long life and

low maintenance, durability and dependability. It offers the first water-cooled

single cylinder engine in the 15 HP segment, and its side shift gear is easy and

comfortable to use.

The Yuvraj 215 achieves a top speed of 25 kmph, the highest in its class. It can

haul up to 1.5 tons. It’s ideal for farmers ready to upgrade from bullocks or power

tillers, or for farmers who need an additional machine for specific applications like

inter-culture, power generation, or water pumping. Farmers who cultivate

vegetables, tend orchards, or raise cash crops can all benefit from the Yuvraj 215’s

strong value proposition of affordability, power, and performance.

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What is covered in the warranty?

It covers Engine, Manual Gear Box, Front Wheel Drive, Rear Axle, Propeller

Shaft, Suspension, Steering, Clutch, Breaking system, Diesel Injection System

except for standard maintenance items, body, glass and interiors. This Warranty is

mechanical breakdown coverage. If any of the covered parts break down, then for a

period of 365 days from the date of Vehicle purchase, Mahindra First Choice

Wheels will repair or replace any such part(s) at no charge. Mechanical breakdown

coverage applies to the covered parts only.

Benefits:-

Mahindra First Choice Wheels follows a stringent 118 point check to ensure the

quality standard of every certified and offers warranty to take care of unforeseen

failure of engine & many other expensive parts over a limited period of time. For a

hassle-free ownership experience and complete peace of mind, we recommend you

to choose the warranty cards.

SERVICES

Customization Service

Design services

Mahindra Spares

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Customization Service:-

We at Mahindra and Mahindra take pride in being a consumer-centric organization.

Now, we become the first Indian automotive manufacturers to give you a unique

experience. We are in fact the only original manufacturer in India to pursue

automotive customization.

We’re pioneering automotive customization in India, transforming the mass

produced vehicle into an expression of your own tastes, needs, and personality.

Once you pick out your automobile, we offer you an array of customization menus

to completely revise the look and feel of your car. Change everything from details

like color and spot lamps to the structure itself by restyling the body shell, hood,

and bumpers. Overhaul the interior from carpeting to the central console to the

number and type of seats.

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Design Services:-

We offer customized design services through our Italy-based design

house, Mahindra Graphic Research Design. We focus on style, engineering, CAE

(computer-aided engineering), prototypes, and project management to partner with

our clients from start to finish.

Our style consulting begins with an in-depth brand analysis and the development

of a robust brand identity. We take a design through every phase from concept

design to feasibility, detail design, FMEA (failure mode and effects analysis),

DMU (digital mockup), and SOP (standard operating procedure) support. We’ve

provided two wheelers, passenger vehicles, and light and heavy trucks with part

design for BIW (Body in White), exterior and interior trim, and instrument

panels. We also handle regulatory compliance with ECE, CEE, FMVSS, and AIS

standards and ensure part manufacturing and plant process compliance.

We use CAE(computer-aided engineering) to model vehicle performance. We test

static and dynamics like bending and torsion stiffness, Eigen modes, multibody

analysis, and CFD (computational fluid dynamics). We monitor lifetime

performance from NVH (noise, vibration, and harshness) to fatigue and

durability. And we conduct comprehensive safety tests and simulate

manufacturing processes like auto form and moldflow.

Finally, we offer project management services. Let us take care of deadlines and

milestones management, resource and supplier management, and quality

procedures. We also provide product to market support including homologation

procedures, testing, and SOP in product plants.

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Mahindra Spares:-

In addition to making ground-breaking vehicles, we build many of

the important parts that go into them. Since 2002, we've offered a wide range of

spares for Mahindra’s automobiles, farm, Mahindra Navistar trucks, three

wheelers, and other companies in both domestic and overseas markets. Our goal is

to provide our customers with nothing but the best, and if we can’t source a high-

quality component from another location, we learn to build it ourselves.

You can take advantage of our spare parts to improve the machinery you depend

on, from your scooter to your tractor to your SUV. With more than 36,000 active

parts handled by over 800 vendors through our hub and spoke model, you can rest

assured that you get the best parts and service at a reduced order-to-delivery time.

N.K.Sing (Mumbai)

Owner of Mahindra Scorpio

I was completely satisfied by the work done by MFCS. Good service.

Ramavatar Agrawal (Mumbai)

Owner of Mahindra Logan

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I feel my car is in safe hands, after my car warranty expired. Prefer Mahindra First

Choice Services for taking personal care & reasonable repair charges

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PLACE

Another Division, Farm Equipment manufactures agricultural tractors and

implements used in conjunction with tractors. It became the market leader in Indian

tractor market in 1983 and has retained the position till today.

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The Company's outstanding manufacturing skills allow it to constantly innovate

and launch new products for Indian market. The "Scorpio", a sport utility vehicle

(SUV) won National Award for outstanding in-house research and development in

2003. It also won "Car of the Year" from Business Standard Monitoring and CNBC

Auto Car. Also, it received the "Best SUV of the Year" and "Best Car of the Year"

Awards from BBC on Wheels.

It has also launched India's first tractor with turbo technology - the Mahindra

Sarpanch 595 D1 Super Turbo. The manufacturing units of Mahindra and

Mahindra are at Jaipur, Rudrapur, Nagpur, Nashik (2 units), Mumbai (2 units) and

Zaheerabad.

Mahindra motor’s manufacture & distribution strate gy:

January, 23, 2013: Mahindra World City (MWC), Jaipur, an Integrated Business

City reaches another milestone with the signing of Mahindra & Mahindra Ltd to set

up a distribution hub for spare parts business in 10 acres within Domestic Tariff

Area of Mahindra World City, Jaipur. The new facility will be started with an

investment of Rs. 30 Cr and will provide direct employment to over 300 people.

The spare parts business unit caters to the spare parts requirements of Mahindra

vehicles and tractors in use by customers to provide them with the best and genuine

spares through capabilities in sourcing, assembling, warehousing and distribution.

As part of its expansion strategy, the business unit plans to create hubs across India

to cater to the fast growing demand for genuine spare parts.

Dr Pawan Goenka, President – Mahindra Automotive & Farm Equipment Sector

said, "For our new parts distribution hub for Northern markets, Mahindra World

City, Jaipur was the ideal choice for us. MWC is strategically located on NH 8 and

provides world class infrastructure, connectivity with key markets and a conducive

ecosystem to meet all our business needs."

Speaking about the development, Ms Anita Arjundas, MD & CEO, Mahindra

Lifespace Developers Ltd & Director, Mahindra World City, Jaipur, said, “It is an

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important milestone for us in our journey of creating an industrial destination at

Jaipur to have a leading customer like Mahindra & Mahindra Ltd as part of

Mahindra World City, Jaipur.”

About Mahindra World City, Jaipur

Mahindra World City, Jaipur is an integrated business city focused on creating

economic centers of development and new urban nodes. The 2nd such development

from the Mahindra World City stable, Mahindra World City, Jaipur (MWCJ) is

spread over an area of 3000 acres and provides corporates with a world-class

platform to expand their businesses to compete globally. Mahindra World City,

Jaipur offers Special Economic Zones, a Domestic Tariff Area and Social

Infrastructure Zone and is a 74:26 joint venture between Mahindra Lifespace

Developers Ltd. (a Mahindra group company) and the Rajasthan State Industrial

Development and Investment Corporation Ltd (RIICO, an agency of the

Government of Rajasthan).MWCJ includes exclusive zones for IT/ITeS

Companies, Engineering & related industries, handicraft companies, gem &

jewellery companies and apparel companies. Besides these export oriented zones,

MWCJ also has a Domestic Tariff Area (DTA) for catering to companies serving

the domestic market. Mahindra World City will also have a dedicated Logistics and

Warehousing Zone for the manufacturing companies in order to provide complete

end to end solutions. Social Infrastructure in the form of housing, education and

health institutes, recreational zones, and retail and hospitality centers also forms an

integral part of the development.

Today, 43 companies have already signed-up with MWCJ in various zones viz.

IT/ITeS, Engineering & Related Industries and Handicrafts, which include names

like JCB, Perto, Infosys, Wipro, Deutsche Bank, State Bank of India, ICICI Bank,

EXL, Nucleus Software, Nagarro Software, Truworth, Girnar Soft, QH Talbros,

Dynamic Cables, Poly Medicure, Gravita India, Knit Pro, and Ratan Textiles

among others.

152

Mahindra World City, Jaipur is one of 16 projects world-wide to be part of the

Clinton Climate Initiative’s (CCI) effort to create Climate Positive cities. Total

investments into Mahindra World City, to date, have crossed Rs. 1000 crores.

About Mahindra Spares Business Unit (SBU)

Mahindra Spares Business Unit (SBU) is a part of the Automotive and Farm

Equipment Sector of the Mahindra Group and caters to spares parts requirement of

Mahindra vehicles and tractors in use for repair and maintenance. SBU procures

parts from various Mahindra approved vendors and plants across India and supplies

to the market through channel partners. SBU was established in August 2002 to

provide Mahindra customers the best possible and quicker solutions to their spare

Parts needs through its abilities in sourcing, assembling, warehousing and

distribution. The total turnover handled for Financial Year 2012 is around Rs.1,300

crores. New capacity creation is being done to facilitate handling business which is

expected to reach Rs.6,000 crores by 2020. SBU supplies entire range of spares for

M & M vehicles in domestic and overseas markets. The product range is

maintained and supplied in the market not just for profitability but also for

supporting vehicles on road as per the commitment of sectors to end users.

Distribution Strategy - Serve less markets at a time but serve them well

Since the Scorpio was targetted at an urban clientele it needed a stronger ditribution

presence in Metros and urban areas. Hence, the distribution channel had to focus on

providing an appealing experience for modern car buyers and on offering

international standards of auto retail.

153

State Location Class

Madhaya Pradesh Pithampur Two wheelers

Uttarakhand Rudrapur Commercial vehicles

Karnataka Bangalore Passenger vehicles

Maharashtra Nashik Passenger vehicles

Maharashtra Mumbai Commercial vehicles

Rajsthan Jaipur spare parts

Andra Pradesh Zaheerabad tractor

Other

Location Details - Mahindra and Mahindra

Location Type Address

Factory/plant Nashik

Nasik - 422403

Maharashtra – India

Branch Office 7, Dr. Ishaque Road (Old KYD Street)

Kolkata - 700016

West Bengal - India

Registered Office Gateway Building, Apollo Bunder

Mumbai - 400001

Maharashtra - India

Phone : 22021031

Fax : 22875485

Email : [email protected]

154

Branch Office Raheja Chambers, First Floor, 12 Museum Road.

Bangalore - 560001

Karnataka - India

Factory/plant Nagpur

Nagpur -

Maharashtra - India

Factory/plant Jaipur

Jaipur -

Rajasthan - India

Branch Office Mahindra Towers 2 - A Bhikaji Cama Place

New Delhi - 110066

Delhi - India

Branch Office Mahindra Towers, First Floor, 17/18 , Pattulous Road

Chennai (Madras) - 600002

Tamil Nadu - India

Factory/plant Igatpuri

Igatpuri -

Maharashtra - India

Factory/plant Haridwar

155

Haridwar -

Uttaranchal - India

Factory/plant Pune.

Maharashtra - India

Mahindra Dealers in India

Mahindra dealers in Agartala Mahindra dealers in Agra

Mahindra dealers in Ahmedabad Mahindra dealers in Ahmednagar

Mahindra dealers in Ajmeer Mahindra dealers in Akola

Mahindra dealers in Aligarh Mahindra dealers in Allahabad

Mahindra dealers in Alwar Mahindra dealers in Ambala

Mahindra dealers in Amritsar Mahindra dealers in Anantapur

Mahindra dealers in Asansol Mahindra dealers in Aurangabad

Mahindra dealers in Azamgarh Mahindra dealers in Balasore

Mahindra dealers in Bangalore Mahindra dealers in Bareilly

Mahindra dealers in Basti Mahindra dealers in Bellary

Mahindra dealers in Bhilwara Mahindra dealers in Bhopal

Mahindra dealers in Bhuvaneshwar Mahindra dealers in Bikaner

Mahindra dealers in Chandigarh Mahindra dealers in Chennai

Mahindra dealers in Chhindwara Mahindra dealers in Cochin

156

Mahindra dealers in Coimbatore Mahindra dealers in Cuddalore

Mahindra dealers in Cuttack Mahindra dealers in Dehradun

Mahindra dealers in Delhi Mahindra dealers in Dhanbad

Mahindra dealers in Dhule Mahindra dealers in Dibrugarh

Mahindra dealers in Dimapur Mahindra dealers in Dispur

Mahindra dealers in Etawah Mahindra dealers in Faizabad

Mahindra dealers in Gangtok Mahindra dealers in Gurgaon

Mahindra dealers in Guwalior Mahindra dealers in Hoshangabad

Mahindra dealers in Hoshiarpur Mahindra dealers in Hubli

Mahindra dealers in Hyderabad Mahindra dealers in Indore

Mahindra dealers in Itanagar Mahindra dealers in Jabalpur

Mahindra dealers in Jagdalpur Mahindra dealers in Jaipur

Mahindra dealers in Jalandhar Mahindra dealers in Jalgaon

Mahindra dealers in Jammu Mahindra dealers in Jhansi

Mahindra dealers in Jodhpur Mahindra dealers in Kanpur

Mahindra dealers in Karimnagar Mahindra dealers in Karnal

Mahindra dealers in Khandwa Mahindra dealers in Kharagpur

Mahindra dealers in Kolhapur Mahindra dealers in Kolkata

Mahindra dealers in Korba Mahindra dealers in Kota

Mahindra dealers in Latur Mahindra dealers in Leh

Mahindra dealers in Lucknow Mahindra dealers in Ludhiana

Mahindra dealers in Madurai Mahindra dealers in Malda

157

Mahindra dealers in Mandi Mahindra dealers in Mangalore

Mahindra dealers in Meerut Mahindra dealers in Mirzapur

Mahindra dealers in Mohali Mahindra dealers in Motihari

Mahindra dealers in Mumbai Mahindra dealers in Nagaur

Mahindra dealers in Nagpur Mahindra dealers in Nanded

Mahindra dealers in Nasik Mahindra dealers in Navi Mumbai

Mahindra dealers in Nellore Mahindra dealers in Noida

Mahindra dealers in Ongole Mahindra dealers in Panvel

Mahindra dealers in Patiala Mahindra dealers in Patna

Mahindra dealers in Pondicherry Mahindra dealers in Port Blair

Mahindra dealers in Porvorim Mahindra dealers in Pune

Mahindra dealers in Raipur Mahindra dealers in Rajahmundry

Mahindra dealers in Ratlam Mahindra dealers in Ratnagiri

Mahindra dealers in Rewari Mahindra dealers in Rourkela

Mahindra dealers in Salem Mahindra dealers in Sangli

Mahindra dealers in Satna Mahindra dealers in Secunderabad

Mahindra dealers in Shillong Mahindra dealers in Sikar

Mahindra dealers in Silchar Mahindra dealers in Siliguri

Mahindra dealers in Sirsa Mahindra dealers in Solapur

Mahindra dealers in Sriganganagar Mahindra dealers in Srinagar

Mahindra dealers in Thane Mahindra dealers in Tirunelveli

Mahindra dealers in Trichy Mahindra dealers in Trivandrum

158

Mahindra dealers in Udaipur Mahindra dealers in Varanasi

Mahindra dealers in Vellore Mahindra dealers in Vijayawada

PEOPLE

Management team and key personnel:-

Name Designation

A K Nanda Director

A S Ganguly Director

Anand G Mahindra CEO

Anand G Mahindra Vice Chairman & Mng.Director

Anita Arjundas CEO Real Estate Sector

159

Anoop Mathur President (Two-Wheeler Sector)

Anupam Puri Director

Bharat Doshi Group Chief Financial Officer

Bharat Doshi Executive Director

Bishwambhar Mishra Chief Executive - Tractor & Farm Mechanization

Deepak S Parekh Director

Hemant Luthra President (Systems & Technologies Sector)

Keshub Mahindra Chairman / Chair Person

M M Murugappan Director

Nadir B Godrej Director

Narayan Shankar Company Secretary & Compliance Officer

Narayan Shankar Secretary

Narayanan Vaghul Director

Pawan Goenka President (Auto. & Farm Equipment Sectors)

Pravin Shah Chief Executive - International Operations

R K Kulkarni Director

Rajan Wadhera Chief Executive

Rajeev Dubey President (Group HR & After-Market)

Rajesh Jejurikar Chief Executive - Automotive Division

Romesh Kaul Global Chief Executive Officer

Ruzbeh Irani Exe. VP - Corp. Strategy & Chief Brand Officer

160

Shriprakash Shukla President-Special Group Projects

Uday Y Phadke President (Finance, Legal & Fin. Services Sector)

Ulhas N Yargop President-Information Tech. Sector, Group CTO

V S Parthasarathy Group CIO, Exe. Vice President - Finance & M&A

Vikram Singh Mehta Additional Director

Vishakha N Desai Additional Director

Zhooben Bhiwandiwala Executive Vice President

161

Business Structure or Organization Structure:

Director

Nadir Godrej

Secretary

Narayan Shankar

CEO

Anand Mahindra

Director

Deepak Parekh

Chairman of the Board

Keshub Mahindra

Director

Arun Dasgupta

Director

M.Murugappan

Director

Naraynan Vaghul

Director

A.Ganguly

Director

R.Kulkarni

Director

Anupam Puri

Trade, Retail & Logistics Sector

k. venkatraman

Systems & Technologies Sector

S.P. Shukla

Information Technology Sector

Ulhas Yargop

Human Resources, After-Market & Corporate Services

Rajeev Dubey

Finance, Legal & Financial Services

Uday Phadke

Infrastructure Development Sector

Sudhir Nair

Farm Equipment Sector

Pawan Goenka

Automotive Sector

Pawan Goenka

CFO

Bharat Doshi

162

SWOT Analysis:-

Strength:-

Mahindra has been one of the strongest brands in the Indian automobile market.

Mahindra group give employment to over 1,55,000 employees.

Excellent branding and advertising, and low after sales service cost.

Sturdy SUV’s good for Indian roads and off-road terrain.

Good reputation among customer.

Strong Brand name recognition.

Weakness:-

Mahindra’s partnership with Renault did not live up to international quality

standards through their brand Logan.

Economic Crash

Competition with other companies

Opportunities:-

Developing hybrid cars and fuel efficient cars for the future.

Tapping emerging markets across the world and building a global brand.

Fast growing automobile market.

Growing in the market through electric car Reva (controlling stake) and entry into

two-wheeler segments.

Unfulfilled customer needs.

Use of advance technology for technical advantage.

163

Threats:-

Government policies for the automobile sector across the world.

Ever increasing fuel prices.

Intense competition from global automobile brands.

Substitute modes of public transport like buses, metro trains etc.

Possible shift in cutomer taste due to substitute vehicles.

Trade barriers due to economic crash.

New trading Regulations implemented by SEBI.

164

BCG METRIX

The BCG matrix is used to know about the company position about their products

that which products giving the revenue and which gives losses.

Stars:- Mahindra and Mahindra has the XUV 500 and Scorpio as the top selling

car’s for the company. XUV 500 is the market leaders in SUV segment in India

while Scorpio is top selling and famous in rural markets of India.

Cash cows:- Bolero is the best-selling vehicle for the last 2 years crossing sale of

more than 1 lac units. In 2013 bolero crossed 1,17,000 units sold across India.

Bolero was first launched in the year 2001, and it has become a cash cows for

Mahindra for the last 13 years whereas Mahindra xylo had launched in the year

2009. It is the best MUV in India.

XUV 500

Scorpio

(Stars)

Verito Vibe

e20

(?)

Bolero

Xylo

(Cash Cows)

Mahindra Voyager

Mahindra Quanto

(Dogs)

BCG Matrix of

Mahindra and

Mahindra

Relative Market Share High Low

High

Low

165

Question Marks (?):- Mahindra and Mahindra has launched the Verito Vibe the

sporty sedan car in to compete in small car segments whereas the Mahindra e2o is

the first-in-line of next-generation global Electric Vehicle.e2o is born keeping YOU

and the future in mind. We are confident the e2o will transform you into a different

world with its Future Inspired design, Technically Advanced DNA, & being the

most convenient way to travel in the city.

Dogs:- Mahindra’s voyager had a flop for Mahindra and Mahindra due to it’s price

whereas Quanto is also facing loss of opportunity because the model is not selling

as per company’s projected target. The company’s thought it will recover the

investment but due to not selling this models BEP were gone for toss atleast 10

years to recover. So, it has finally became a Dogs for the company

166

Sustainable Competitive Advantage

E-business can be an effective tool in building and maintaining a sutainable

competitive advantage, and is helping the Mahindra group forge new relationships

with its stakeholders.

All of us in Indian industry are aware of the Internet, and the

tremendous impact it is going to have on business. Fuelled by the recent alliance

between traditional rivals General Motors, Ford and Daimler Chrysler to form a

unified Business-to-Business (B2B) Exchange, the pervasive nature of the Internet

can only grow. However, this is just the beginning; as more companies become e-

enabled, e-businesses will soon rule the roost. The time has come for conventional

Bricks-and-mortar businesses to adapt to the change in the environment and

become Internet enabled e-businesses. E-business can be an effective tool in

building and maintaining a sustainable competitive advantage, and is helping the

Mahindra group forge new relationships with its stakeholders. The Mahindra group

has followed the e-business evolution model shown in Figure 1 on the next page.

The process involves the following phases.

The Mahindra World Web site was launched in June 1996. The objective of

launching the site was to disseminate information about the organisation to all

stakeholders of the company.

A comprehensive ERP system is the backbone of any e-business strategy.

Mahindra & Mahindra Ltd had several choices, and selected SAP since it offered

the group the best functionalities for its core businesses – automotive and farm

equipment.

Involved putting an intranet in place. This served several purposes simultaneously,

including employee education and awareness, and knowledge

management.

Over the past year the Mahindra group has launched several e-ventures,

including automartindia.com, officemartindia.com and property martin-

dia.com (a j o i n t venture with HDFC). This represents another step in

167

the evolut ion of the group’s e-business strategy–moving from an

information based e- business model to a transactions based one.

The group is currently in the process of implementing its customer

relationship management (CRM) and supply chain management

(SCM).

The Mahindra group is using various information technology

initiatives to realise its e-business strategy, which will help the

organisation in two ways:

(a) Reduce costs and delays in procurement of material from suppliers.

The inbound transactions component of an e-business strategy can be

implemented using tools such as SCM, which connects organisations to

their vendors. All the transaction flows between an organisation and its

168

vendors, material, inventory and so on, can be automated. This reduces

cycle time and administrative costs, improves inventory control and

accuracy of communications.

E-procurement initiatives can enhance the entire material procurement

system, from supplier selection, contracting, planning, supplier

relationship manage- ment, decision management and execution

(production/manufacturing).The Mahindra group has hundreds of

vendors and is using SCM and e-procurement to improve efficiencies in

terms of both time and cost.

(b) Find ways in which to serve customers better. An e-business

strategy can be used to implement a CRM initiative. CRM can help an

organisation collect data on customers’ buying habits using data

mining techniques, and tailor their offerings to suit i n d i v i d u a l groups

of customers.

Organisations can use CRM to develop focused marketing and sales

promotion campaigns as part of their advertising strategy. This, in turn,

can help organisations develop closer relationships with their customers

and earn customer loyal- ty, resulting in repeat purchases and higher

sales.

Mahindra & Mahindra Ltd, for example, is in the process of

implementing a CRM strategy that will help the organisation obtain

valuable, real-time information about customer buying behaviour.

The Mahindra group is aware of the opportunities presented by e-

business and is in the process of developing and implementing a

comprehensive e-business strategy that will help the group.

consolidate its position in the market.

(The author is President-Telecom and

Software Sector, Mahindra group)

169

NEW RESEARCH AND DEVELOPMENT

We constantly strive to build products with a lighter environmental impact. Our

R&D teams are currently pursuing technology to enable full hybrid vehicles,

micro-hybrid models, biofuel variants, more advanced electric cars, hydrogen

combustion engines, and the use of recyclable materials.

For example, we are the first company to introduce micro-hybrid technology in the

light commercial vehicle(LCV) segment with our Bolero Maxi-Truck. The micro-

hybrid variant now accounts more than 30% of Bolero Maxi-Truck sales and

Mahindra Reva is pushing the technology of electric cars, with the largest deployed

fleet in the world.

170

DIRECTORS REPORT:-

Dear Shareholders,

The Directors present their Report together with the audited accounts of your

Company for the year ended 31st March, 2012.

The Financial Year 2011-12 was beset with challenges. Global macro risks,

stemming from sovereign debt issues in the advanced economies and turmoil in the

Middle East, remained high through the year. At the same time, a weak economic

environment at home- rising fiscal and current account deficits, persistently high

inflation, rising interest rates, a weakening currency and prolonged policy and

regulatory uncertainty - added to the risks facing domestic firms and households.

Demand as a consequence, turned sluggish and the country’s economic growth

dropped to 6.9% this year (as per advance estimates put out by the CSO),

considerably below the 8.4% growth registered in the previous two fiscals.

While the agricultural and services sectors displayed some resilience, the unsettled

global outlook and constrained domestic economic environment took a particularly

heavy toll on industrial activity during the year. Environmental hurdles, corruption

charges and slowing Government approvals brought mining activity to a standstill

which severely constrained power generation and other core infrastructure

activities in the country. Hemmed in by structural impediments and rising input

costs on the one hand and weakening domestic and external demand on the other,

manufacturing activity suffered a severe loss in momentum with volume growth

dropping from 7.7% year-on-year in the first quarter of the Financial Year 2012 to

0.2% in the fourth quarter of the Financial Year 2012. Over all, industrial

production grew a paltry 2.8% in 2011-12, in sharp contrast to the 8.2% increase

registered in the previous fiscal.

171

Financial Performance

In these challenging times, the Automotive and Farm Divisions of your Company

have secured good performance reflecting in substantial growth in the net income

of the Company by 35.3% to Rs.32,319 crores in the year under review from

Rs.23,894 crores in the previous year.

Consequent to this commendable performance, the Profit for the year before

Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase

of 9.0% at Rs.4,237 crores as against Rs.3,888 crores in the previous year.

Similarly, Profit after tax clocked an increase of 8.1% at Rs.2,879 crores as against

Rs.2,662 crores in the previous year. Your Company continues with its rigorous

cost restructuring exercises and efficiency improvements which have resulted in

significant savings through continued focus on cost controls, process efficiencies

and product innovations that exceed customer expectations in all areas thereby

enabling the Company to maintain profitable growth in the current economic

scenario.

Dividend

Your Directors are pleased to recommend a dividend of Rs.12.50 per Ordinary

(Equity) Share of the face value of Rs.5 each, payable to those Shareholders whose

names appear in the Register of Members as on the Book Closure Date. The equity

dividend outgo for the Financial Year 2011-12, inclusive of tax on distributed

profits (after reducing the tax on distributed profits of Rs.23.38 crores payable by

the subsidiaries on the dividends receivable from them during the current Financial

Year) would absorb a sum of Rs.868.61 crores (as against Rs.802.64 crores

comprising the dividend of Rs.10.50 per Ordinary (Equity) Share and also a Special

Dividend of Re.1 per Ordinary (Equity) Share aggregating Rs.11.50 per Ordinary

(Equity) Share of the face value of Rs.5 each paid for the previous year).

172

Performance Review

Automotive Division:

Your Company’s Automotive Division recorded total sales of 3,98,357 vehicles

(including Verito) and 70,988 three-wheelers as compared to 2,99,342 vehicles

(including Verito) and 64,740 three-wheelers in the previous year registering a

growth of 33.1% and 9.7% in vehicle sales and three-wheeler sales respectively.

On the domestic sales front, your Company sold 2,45,700 Passenger Vehicles

[including 2,02,217 Utility Vehicles (UVs), 25,644 Multi-Purpose Vehicles

(MPVs) and 17,839 Cars] registering a growth of 36.4% over the previous year’s

volumes of 1,80,180 Passenger Vehicles [including 1,69,205 UVs, 966 MPVs and

10,009 Cars by Mahindra Automobile Distributor Private Limited] (for a

meaningful comparison, sales numbers of Verito Car is also added in the previous

year''s sales numbers). In the commercial vehicle segment, your Company sold

1,27,029 vehicles [including 53,895 vehicles < 2T GVW and 73,134 vehicles

between 2-3.5T GVW] registering a growth of 21.4% over the previous year''s

volume of 1,04,622 commercial vehicles [including 43,717 vehicles < 2T GVW

and 60,905 vehicles between 2-3.5T GVW]. In the three-wheeler segment, your

Company sold 67,440 three- wheelers registering a growth of 8.5% over the

previous year''s volume of 62,142 three-wheelers.

Your Company’s UV sales volume grew by 19.5% and your Company

strengthened its leadership position of the domestic UV market by posting a market

share of 55.1% against the previous year market share of 53.7%. During this year,

Bolero posted record sales and became the first SUV in India to cross the milestone

of 1 lakh sales in a year. Bolero retains the title of India''s largest selling SUV for

the 6th consecutive year. It is also the 7th highest selling passenger vehicle in India.

The Scorpio continues to strengthen its iconic status with sales of over 50,000 units

in the year under review. In September, 2011, your Company launched the

XUV5OO. The XUV5OO is loaded with enhanced technology and safety features,

a strong diesel engine, luxurious interiors and unprecedented refinement, all at a

very competitive price. Twenty two awards received from various Media Groups

bear testimony to the mass appeal and acceptance of the product. The XUV5OO

173

was launched simultaneously in India and South Africa - a first for the Indian

Automotive Industry.

With an aim to strengthen its product portfolio and enter new segments, your

Company successfully launched many new products over the past two years. As a

result, the Company’s share of the Indian Automotive market stood at 11.5% in

2011-12 as compared to 9.6% in the previous year.

In the Overseas market, your Company registered a volume growth of 70.2% over

the previous year. This growth was driven by volume growth in the SAARC

countries, Chile and South Africa. During the year under review, your Company

sold 25,628 vehicles [including 157 vehicles sourced from Mahindra Navistar

Automotives Limited ("MNAL")] and 3,548 three-wheelers in the Overseas market

as compared to 14,540 vehicles [including 305 vehicles sourced from MNAL] and

2,598 three-wheelers in the previous year.

Spare parts sales for the year stood at Rs.873.99 crores (including Exports of

Rs.55.47 crores) as compared to Rs.666.97 crores (including Exports of Rs.28.3

crores) in the previous year, registering a growth of 31.0%.

Farm Division:

Your Company’s Farm Division (including the Swaraj Division) recorded sales of

2,36,666 tractors as against 2,14,325 tractors sold in the previous year, recording a

growth of 10.4%.In the Financial Year 2012, the Indian tractor industry continued

to enjoy double digit growth. The domestic market recorded sales of around

5,35,210 tractors as compared to 4,80,377 tractors in the previous year, recording a

growth of 11.4%.

Your Company’s performance was in line with the tractor industry with domestic

sales of 2,22,944 tractors as compared to 2,02,513 tractors in the previous year

recording a growth of 10.1%. Your Company’s market share now stands at 41.4%

as compared to 42% in the previous financial year, thus completing 29 years of

leadership in the Indian tractor industry. Your Company’s tractor exports grew by

174

16.2% to reach 13,722 tractors as compared to 11,812 tractors exported in the

previous year.

Beyond agriculture, in the power generation space under the Mahindra Powerol

Brand, your Company sold 29,122 engines in the current financial year as against

27,748 engines in the previous year. The growth in volume was achieved in spite of

adverse market conditions in the Telecom Sector. Your Company, while retaining

its leadership position in the genset market catering to the telecom space, has

focused its presence in the retail segment. It strengthened its position in the

fragmented inverter/Home UPS market and sold 83,993 units against 47,217 units

in the previous year, a growth of 78%.

Mr. Anand G. Mahindra commenced his professional career with Mahindra Ugine

Steel Company Limited in 1989 and then joined the Company in 1991 as Deputy

Managing Director. He has been largely credited for the Company’s diversification

into new businesses viz. real estate and hospitality management. In April, 1997,

Mr Anand G. Mahindra was appointed as Managing Director and in January, 2001

was given additional responsibility of Vice-Chairman.

The Board has placed on record its sincere appreciation of the valuable services

rendered by Mr. Dasgupta during his tenure as a Director of the Company.

Mr. Deepak S. Parekh, Mr. A. K. Nanda, Mr. Narayanan Vaghul and Mr. R.

K. Kulkarni retires by rotation and, being eligible, offer themselves for re-

appointment.

The Board of Directors at its Meeting held on 20th March, 2012 have pursuant to

the approval of the Governance, Remuneration and Nomination Committee of the

Board and subject to the approval of the Members to be obtained at the ensuing

Annual General Meeting of the Company, re-appointed Mr. Anand G. Mahindra as

the Managing Director for a period of 5 years with effect from 4th April, 2012 to

3rd April, 2017 and Mr. Bharat Doshi as the Executive Director for a period with

effect from 28th August, 2012 to 31st March, 2015.

175

Particulars of Employees

The Company had 159 employees who were in receipt of remuneration of not less

than Rs.60,00,000 during the year ended 31st March, 2012 or not less than

Rs.5,00,000 per month during any part of the said year. However, as per the

provisions of section 219(1 )(b)(iv) of the Companies Act, 1956, the Directors''

Report and Accounts are being sent to all the Members of the Company excluding

the Statement of particulars of employees. Any Member interested in obtaining a

copy of the Statement may write to the Company Secretary of the Company.

For and on behalf of the Board

KESHUB MAHINDRA

Chairman

Mumbai, 30th May, 2012

176

Capital Structure (Mahindra and Mahindra)

Period Instrument Authorized Capital Issued Capital

Face Value

Capital

Frm -To (Rs. cr) (Rs. cr) 5 294.51

2011 2012 Equity Share 600 294.51 5 293.62

2010 2011 Equity Share 600 293.62 5 289.22

2009 2010 Equity Share 600 289.22 10 278.82

2008 2009 Equity Share 600 278.82 10 245.74

2007 2008 Equity Share 375 245.74 10 238.03

2006 2007 Equity Share 275 238.03 10 233.4

2005 2006 Equity Share 275 233.4 10 116.01

2004 2005 Equity Share 175 116.01 10 116.01

2003 2004 Equity Share 175 116.01 10 116.01

2002 2003 Equity Share 175 116.01 10 116.01

2001 2002 Equity Share 175 116.01 10 110.48

2000 2001 Equity Share 175 110.48 10 110.48

1999 2000 Equity Share 175 110.48 10 103.37

1997 1999 Equity Share 175 103.37 10 101.79

1996 1997 Equity Share 175 101.79 10 101.79

1995 1996 Equity Share 175 101.79 1 0.28

1994 1995 Equity Share 92.8 58.8 10 50.33

177

1993 1994 Equity Share 90 50.33 10 36.21

1992 1993 Equity Share 90 36.21 10 35.34

1991 1992 Equity Share 90 35.34 10 19.26

1987 1989 Equity Share 45 19.26 10 19.26

1984 1985 Equity Share 45 19.26 10 19.08

1983 1984 Equity Share 45 19.08 10 11.45

1979 1980 Equity Share 20 11.45 10 5.72

1977 1979 Equity Share 10 5.72 10 4.42

1973 1974 Equity Share 10 4.42

178

Consolidated Balance Sheet of Mahindra

and Mahindra ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 294.52 293.62 282.95 272.62 239.07

Equity Share Capital 294.52 293.62 282.95 272.62 239.07

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Init. Contribution Settler 0.00 0.00 0.00 0.00 0.00

Preference Share Application Money 0.00 0.00 0.00 0.00 0.00

Employee Stock Options 0.00 33.97 8.01 6.55 4.00

Reserves 16,475.69 13,945.31 8,912.18 6,704.69 5,887.15

Revaluation Reserves 0.00 11.18 11.67 12.09 12.47

Net worth 16,770.21 14,284.08 9,214.81 6,995.95 6,142.69

Secured Loans 13,682.07 14,250.26 9,446.27 7,723.89 6,980.00

Unsecured Loans 5,247.42 3,755.02 4,241.88 4,465.60 3,377.08

179

Total Debt 18,929.49 18,005.28 13,688.15 12,189.49 10,357.08

Minority Interest 4,525.16 4,336.64 2,462.35 3,057.26 2,734.52

Policy Holders Funds 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 300.19 2,188.86 39.03 34.60

Total Liabilities 40,224.86 36,926.19 27,554.17 22,281.73 19,268.89

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 32,012.46 29,818.01 13,692.14 13,029.73 10,516.98

Less: Accum. Depreciation 14,451.33 14,836.09 5,651.36 5,341.02 4,219.02

Net Block 17,561.13 14,981.92 8,040.78 7,688.71 6,297.96

Capital Work in Progress 1,131.25 1,769.29 1,967.69 1,440.48 1,316.79

Investments 5,347.21 4,816.97 3,475.37 3,380.82 1,353.78

Inventories 7,157.67 5,449.15 3,541.72 3,266.87 3,269.45

Sundry Debtors 5,346.32 4,084.57 2,877.36 3,485.05 3,752.89

Cash and Bank Balance 3,479.49 1,381.87 1,010.00 1,561.31 772.73

Total Current Assets 15,983.48 10,915.59 7,429.08 8,313.23 7,795.07

Loans and Advances 23,846.11 15,850.39 11,154.90 9,624.63 8,556.15

Fixed Deposits 0.00 677.01 1,623.96 1,400.38 949.09

180

Total CA, Loans & Advances 39,829.59 27,442.99 20,207.94 19,338.24 17,300.31

Differed Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 19,642.00 10,106.63 6,933.63 7,992.80 5,664.07

Provisions 4,002.32 3,129.36 1,835.26 1,614.91 1,390.39

Total CL & Provisions 23,644.32 13,235.99 8,768.89 9,607.71 7,054.46

Net Current Assets 16,185.27 14,207.00 11,439.05 9,730.53 10,245.85

Minority Interest 0.00 0.00 0.00 0.00 0.00

Group Share in Joint Venture 0.00 1,151.01 2,626.70 24.33 40.33

Miscellaneous Expenses 0.00 0.00 4.58 16.86 14.18

Total Assets 40,224.86 36,926.19 27,554.17 22,281.73 19,268.89

Contingent Liabilities 3,226.55 3,549.89 3,778.61 2,343.04 2,241.90

Book Value (Rs) 284.71 242.47 162.48 255.94 256.25

Source : Dion Global Solutions Limited

181

Consolidated Profit & Loss account of

Mahindra and Mahindra ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 60,299.19 37,130.93 33,184.89 27,116.49 24,692.42

Excise Duty 3,612.85 2,682.29 2,102.13 2,072.18 2,154.82

Net Sales 56,686.34 34,448.64 31,082.76 25,044.31 22,537.60

Other Income 3,119.97 2,926.88 969.80 1,856.65 1,718.74

Stock Adjustments 1,158.67 444.34 -26.69 -179.07 618.36

Total Income 60,964.98 37,819.86 32,025.87 26,721.89 24,874.70

Expenditure

Raw Materials 37,079.92 20,725.62 15,461.94 13,108.43 12,431.45

Power & Fuel Cost 865.82 603.92 510.77 471.40 437.95

Employee Cost 6,590.87 3,094.20 4,574.21 4,268.59 3,607.22

Other Manufacturing Expenses 1,409.70 882.55 1,394.69 1,176.06 1,302.27

Selling and Admin Expenses 0.00 4,931.15 3,405.55 3,027.98 2,773.91

Miscellaneous Expenses 7,411.09 863.08 785.64 958.74 677.10

182

Preoperative Exp Capitalised -177.18 0.00 -132.59 -107.80 -157.64

Total Expenses 53,180.22 31,100.52 26,000.21 22,903.40 21,072.26

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 4,664.79 3,792.46 5,055.86 1,961.84 2,083.70

PBDIT 7,784.76 6,719.34 6,025.66 3,818.49 3,802.44

Interest 1,799.57 1,232.07 1,120.50 857.76 715.43

PBDT 5,985.19 5,487.27 4,905.16 2,960.73 3,087.01

Depreciation 1,801.67 972.40 873.52 749.33 582.24

Other Written Off 0.00 0.00 1.68 1.19 0.78

Profit Before Tax 4,183.52 4,514.87 4,029.96 2,210.21 2,503.99

Extra-ordinary items 0.00 -15.71 -4.27 -6.36 -2.22

PBT (Post Extra-ord Items) 4,183.52 4,499.16 4,025.69 2,203.85 2,501.77

Tax 1,407.56 1,317.08 1,154.20 542.17 657.20

Reported Net Profit 2,775.96 3,182.08 2,871.49 1,705.59 1,844.57

Minority Interest -66.74 95.03 412.56 311.45 283.45

Share Of P/L Of Associates -283.96 7.32 -19.63 -11.27 -10.00

Net P/L After Minority Interest & Share

Of Associates 3,065.90 2,891.41 2,232.60 1,488.16 1,884.01

183

Total Value Addition 16,100.30 10,374.90 10,538.27 9,794.97 8,640.81

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 767.48 706.08 549.52 302.34 282.61

Corporate Dividend Tax 127.81 118.68 89.61 62.09 52.19

Per share data (annualised)

Shares in issue (lakhs) 5,890.30 5,872.47 5,659.08 2,726.16 2,390.73

Earning Per Share (Rs) 47.13 54.19 50.74 62.56 77.15

Equity Dividend (%) 0.00 0.00 0.00 0.00 0.00

Book Value (Rs) 284.71 242.47 162.48 255.94 256.25

Source : Dion Global Solutions Limited

184

Consolidated Yearly Results of Mahindra

and Mahindra ------------------- in Rs. Cr. -------------------

Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Net Sales/Income from operations 67,353.95 58,241.40 36,117.53 31,568.54 26,756.35

Other Operating Income 1,381.71 1,176.23 724.83 -- --

Total Income From Operations 68,735.66 59,417.63 36,842.36 -- --

EXPENDITURE

Consumption of Raw Materials 39,062.01 35,190.22 19,228.90 14,159.94 11,960.26

Purchase of Traded Goods 3,001.94 1,452.71 1,213.37 -- --

Increase/Decrease in Stocks -220.36 -1,159.27 -445.27 25.50 180.25

Power & Fuel -- -- -- -- --

Employees Cost 6,819.07 6,590.87 4,218.27 4,582.55 4,274.86

Depreciation 2,079.86 1,801.67 972.40 873.52 749.33

Excise Duty -- -- -- -- --

Admin. And Selling Expenses -- -- -- -- --

R & D Expenses -- -- -- -- --

Provisions And Contingencies -- -- -- -- --

Exp. Capitalised -- -- -- -- --

185

Other Expenses 10,957.21 9,946.42 6,553.65 7,286.90 6,674.44

P/L Before Other Inc., Int., Excpt. Items

& Tax 7,035.93 5,595.01 5,101.04 -- --

Other Income 388.94 327.32 184.01 119.43 163.46

P/L Before Int., Excpt. Items & Tax 7,424.87 5,922.33 5,285.05 -- --

Interest 2,297.00 1,799.57 974.21 979.83 750.16

P/L Before Exceptional Items & Tax 5,127.87 4,122.76 4,310.84 -- --

Exceptional Items 452.50 60.76 -- -- --

P/L Before Tax 5,580.37 4,183.52 4,310.84 -- --

Tax 1,934.63 1,407.56 1,317.08 1,154.20 510.23

P/L After Tax from Ordinary Activities 3,645.74 2,775.96 2,993.76 -- --

Prior Year Adjustments -- -- -- -- -6.38

Extra Ordinary Items -- -- 204.03 245.96 -76.39

Net Profit/(Loss) For the Period 3,645.74 2,775.96 3,197.79 2,871.49 1,705.59

Minority Interest -29.95 66.74 -95.03 -412.56 -311.45

Share Of P/L Of Associates 483.41 283.96 -23.03 19.63 11.27

Net P/L After M.I & Associates 4,099.20 3,126.66 3,079.73 2,478.56 1,405.41

Equity Share Capital 295.16 294.52 293.62 282.95 272.62

Reserves Excluding Revaluation

Reserves 19,651.55 16,464.93 13,979.26 9,893.65 6,757.75

Equity Dividend Rate (%) -- -- -- -- --

186

EPS Before Extra Ordinary

Basic EPS 69.51 -- -- -- 51.57

Diluted EPS 66.76 -- -- -- 48.27

EPS After Extra Ordinary

Basic EPS 69.51 53.18 53.48 45.08 51.57

Diluted EPS 66.76 50.92 51.29 42.17 48.27

Public Share Holding

No Of Shares (Crores) 42.64 42.46 42.46 -- --

Share Holding (%) 69.45 69.15 69.16 -- --

Promoters and Promoter Group Shareholding

a) Pledged/Encumbered

- Number of shares (Crores) 1.26 1.18 1.13 -- --

- Per. of shares (as a % of the total sh. of

prom. and promoter group) 8.18 7.63 7.41 -- --

- Per. of shares (as a % of the total Share

Cap. of the company) 2.06 1.93 1.84 -- --

b) Non-encumbered

- Number of shares (Crores) 14.20 14.33 14.15 -- --

- Per. of shares (as a % of the total sh. of

prom. and promoter group) 91.82 92.37 92.69 -- --

- Per. of shares (as a % of the total Share 23.12 23.33 23.06 -- --

187

Cap. of the company)

Notes

Cash Flow of Mahindra and Mahindra ------------------- in Rs. Cr. -------------------

Mar '12 Mar '11 Mar '10 Mar '09

Mar

'08

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 3497.62 3402.13 2756.00 1026.20 1241.57

Net Cash From Operating Activities 2734.95 2979.75 2336.49 1631.30 825.83

Net Cash (used in)/from

Investing Activities -1936.54 -3734.99 -1345.44 -1941.00

-

2075.08

Net Cash (used in)/from Financing

Activities -306.15 -383.72 -783.87 696.91 811.34

Net (decrease)/increase In Cash and Cash

Equivalents 492.26 -1138.96 207.18 387.21 -437.91

Opening Cash & Cash Equivalents 695.97 1753.13 1543.63 1174.62 1361.79

Closing Cash & Cash Equivalents 1188.23 614.17 1750.81 1561.83 923.88

Source : Dion Global Solutions Limited

188

Key Financial Ratios of Mahindra and

Mar

'12 Mar '11 Mar '10 Mar '09

Mar

'08

Investment Valuation Ratios

Face Value 5.00 5.00 5.00 10.00 10.00

Dividend Per Share 12.50 11.50 9.50 10.00 11.50

Operating Profit Per Share (Rs) 64.00 58.60 53.31 47.12 48.42

Net Operating Profit Per Share (Rs) 540.47 399.79 327.20 479.84 473.09

Free Reserves Per Share (Rs) 195.40 165.14 120.24 170.32 168.36

Bonus in Equity Capital 57.92 58.10 60.29 62.58 71.36

Profitability Ratios

Operating Profit Margin(%) 11.84 14.65 16.29 9.81 10.23

Profit Before Interest And Tax

Margin(%) 9.90 12.67 14.04 7.41 7.87

Gross Profit Margin(%) 10.03 12.89 14.29 7.59 8.12

Cash Profit Margin(%) 10.19 12.19 12.84 9.38 9.68

Adjusted Cash Margin(%) 10.19 12.19 12.84 9.38 9.68

189

Net Profit Margin(%) 8.92 11.14 11.08 6.25 9.45

Adjusted Net Profit Margin(%) 8.92 11.14 11.08 6.25 9.45

Return On Capital Employed(%) 23.58 26.96 27.70 13.99 18.52

Return On Net Worth(%) 23.80 25.92 26.74 16.03 25.51

Adjusted Return on Net Worth(%) 22.41 24.33 26.23 18.49 20.61

Return on Assets Excluding

Revaluations 205.32 174.85 137.95 191.45 180.87

Return on Assets Including

Revaluations 205.50 175.04 138.15 191.90 181.39

Return on Long Term Funds(%) 23.58 27.05 27.73 14.51 19.64

Liquidity And Solvency Ratios

Current Ratio 0.95 0.86 1.11 0.90 0.86

Quick Ratio 0.66 0.61 0.86 0.83 0.74

Debt Equity Ratio 0.26 0.23 0.37 0.77 0.60

Long Term Debt Equity Ratio 0.26 0.32 0.46 0.83 0.63

Debt Coverage Ratios

Interest Cover 23.02 48.36 18.90 9.69 14.64

Total Debt to Owners Fund 0.26 0.23 0.37 0.77 0.60

Financial Charges Coverage Ratio 25.66 54.20 21.26 11.86 17.37

Financial Charges Coverage Ratio Post

Tax 22.23 44.41 16.67 9.41 16.33

190

Management Efficiency Ratios

Inventory Turnover Ratio 14.99 15.64 17.91 14.56 12.49

Debtors Turnover Ratio 19.05 17.97 16.09 12.77 13.26

Investments Turnover Ratio 14.99 15.64 17.91 14.56 12.49

Fixed Assets Turnover Ratio 4.32 4.08 3.85 2.84 3.22

Total Assets Turnover Ratio 2.19 1.86 1.74 1.42 1.64

Asset Turnover Ratio 2.27 2.00 1.85 1.61 3.22

Average Raw Material Holding 15.95 19.18 15.22 16.05 16.77

Average Finished Goods Held 17.73 14.24 13.32 16.26 23.39

Number of Days In Working Capital -5.25 -15.00 11.77 7.80 11.07

Profit & Loss Account Ratios

Material Cost Composition 76.20 70.72 67.30 70.39 70.41

Imported Composition of Raw

Materials Consumed 3.48 1.79 1.51 1.39 1.59

Selling Distribution Cost Composition 3.72 4.41 4.33 4.39 7.11

Expenses as Composition of Total Sales 5.83 4.68 4.11 5.28 7.81

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 30.17 30.15 29.87 37.29 29.10

Dividend Payout Ratio Cash Profit 25.14 26.09 25.37 27.65 23.91

Earning Retention Ratio 67.96 67.88 69.55 67.67 63.99

191

Cash Earning Retention Ratio 73.58 72.44 74.22 75.17 71.61

AdjustedCash Flow Times 0.97 0.83 1.19 3.22 2.29

Mar

'12 Mar '11 Mar '10 Mar '09

Mar

'08

Earnings Per Share 48.88 45.33 36.89 30.69 46.15

Book Value 205.32 174.85 138.02 191.91 181.43

Source : Dion Global Solutions Limited

192

Competition

Name Last Price Market Cap.

(Rs. cr.)

Sales

Turnover

Net Profit Total

Assets

Mah and Mah 971.65 59,657.44 40,441.16 3,352.82 15,278.91

Maruti Suzuki 1,554.55 46,959.86 43,587.93 2,392.13 16,265.70

Hind Motors 7.90 145.97 525.15 -46.39 156.03

Balance Sheet ------------------- in Rs. Cr. -------------------

Mah and

Mah Maruti Suzuki Hind Motors

Mar '12 Mar '12 Mar '12

Sources Of Funds

Total Share Capital 294.52 144.50 86.57

Equity Share Capital 294.52 144.50 86.57

Share Application Money 0.00 0.00 3.61

Preference Share Capital 0.00 0.00 0.00

Reserves 11,799.26 15,042.90 -61.42

Revaluation Reserves 10.91 0.00 0.00

Networth 12,104.69 15,187.40 28.76

193

Secured Loans 400.18 0.00 35.20

Unsecured Loans 2,774.04 1,078.30 92.05

Total Debt 3,174.22 1,078.30 127.25

Total Liabilities 15,278.91 16,265.70 156.01

Mah and

Mah Maruti Suzuki Hind Motors

Mar '12 Mar '12 Mar '12

Application Of Funds

Gross Block 8,063.18 14,734.70 478.82

Less: Accum. Depreciation 3,552.36 7,214.00 366.62

Net Block 4,510.82 7,520.70 112.20

Capital Work in Progress 922.26 1,406.30 15.15

Investments 10,310.46 6,147.40 85.31

Inventories 2,358.39 1,796.50 61.85

Sundry Debtors 1,988.36 937.60 19.67

Cash and Bank Balance 630.57 1,776.10 35.74

Total Current Assets 4,977.32 4,510.20 117.26

Loans and Advances 2,767.19 2,140.10 22.57

Fixed Deposits 557.86 660.00 0.00

194

Total CA, Loans & Advances 8,302.37 7,310.30 139.83

Deffered Credit 0.00 0.00 0.00

Current Liabilities 6,921.73 5,420.50 187.32

Provisions 1,845.27 698.50 9.14

Total CL & Provisions 8,767.00 6,119.00 196.46

Net Current Assets -464.63 1,191.30 -56.63

Miscellaneous Expenses 0.00 0.00 0.00

Total Assets 15,278.91 16,265.70 156.03

Contingent Liabilities 2,633.99 5,925.90 103.59

Book Value (Rs) 205.32 525.68 1.45

Source : Dion Global Solutions Limited

195

Recent News:

Due to decrease in sales Mahindra and Mahindra has laid off 500 temporary staff

employed at its Chakan plant near Pune. The temporary workers were employed

mainly at the company’s logistics and support division, sources told the paper.

An M&M spokesman said: "We have reduced 500 temporary workers from across

our plants due to the prevailing situation within the auto industry. We have not yet

taken any call on delaying investments but if the current situation prevails we may

have to."

The company manufactures its XUV500 and Rexton SUVs and commercial

vehicles at the plant. It also has factories in Nashik and Haridwar.

M&M posted a 7% decline in domestic sales in June to 36,207 vehicles, down from

38,951 units in the same month last year. Earlier this month, the company

announced it would stop production at its plants for up to eight days during July to

reduce inventory.

Along with other carmakers, the company has been hit by persisting weak demand

and the falling rupee, leading to an increase in manufacturing costs.

Car sales fall 20% in March despite record discounts

After a free fall in February, car sales in India for the month of March hit another

record low, leading to the overall car sales moving into a negative territory for the

entire fiscal, the first in a decade. Passenger car sales for March fell over 20% led

by an across-the board sharp decline posted by leading carmakers that included

Maruti Suzuki, Hyundai India, Tata Motors and Volkswagen, among others.

In April, nine car companies remained negative on sales chart, while only six

managed to increase sale in the domestic market. Major carmakers like Maruti

Suzuki, Honda Car India, Mahindra&Mahindra, Renault India posted good sales in

the domestic market, while tougher times were faced by Ford Motor, Hyundai, Tata

Motor and Toyota Kirloskar Motor whose sales dipped last month over the

previous year. This follows a 7% fall in sales for the 12-month financial year that

ended in March, raising speculation that the entire passenger car industry may be

196

heading for some sluggish period in the 12-month new fiscal that started in April

this year.

Carmakers are pinning hope that the recent cut in the prices of petrol may boost

demand. Already petrol cars sales have picked up in last month and smaller micro

models like Alto, Eon and WagonR that are available only in petrol increased to

47,800 units sold in April 2013 from 44,380 cars of April 2012.

Analysts tracking the auto industry remained skeptical of an early recovery and

hoped that new car launches and an upbeat festive period could only bring any

turnaround in sales. But, cautioned that before that the auto industry would have to

face four months of monsoon when sales generally remain bleak across India

THE AUTOMOBILE INDUSTRY IN AND BEYOND THE CRISIS

The automobile industry has been severely hit by the crisis

The automobile industry is among the sectors that have been hit most by the

recession. Demand for cars fell sharply, accentuating the difficulties of excess

production capacity already faced before the crisis and deepening the economic

downturn in major car-producing countries. Relative to the general downturn, the

decline in car sales was nonetheless not deeper than what was observed in the past.

The automobile industry is economically important and intertwined with business

cycles

This chapter considers the role of the automobile industry in the current cycle. It

first examines the role of the industry in the economy, before analysing the relation

between the automobile and business cycles. After casting some light on the

sources of the collapse in car sales at the start of the crisis, the chapter discusses the

policy measures, in particular car scrapping programmes, put in place to support

the automobile industry. Finally it investigates the short and medium-term

prospects for the automobile industry.

197

The main results are the following:

The size of the automobile industry relative to overall activity is small, but because

of its strong linkages with other parts of the economy, the final impact of a shock in

the industry on the broader economy is sizable.

The automobile and business cycles usually move in line with each other but the

amplitude of the cycle is higher in the automobile industry. The volatility of the

automobile industry is also higher than that of the manufacturing industries as a

whole.

Evidence for the United States and Canada suggests that the reduction in car sales

since mid-2008 has been magnified by the lack of access to credit, leading many

households to postpone their car purchases. This implies that continued

improvement in financial market conditions could provide an impetus to car sales.

The importance of the automobile industry in the economy

The industry is more important than its size implies

The automobile industry1 represents a relatively small share of the overall size of

OECD economies in terms of value added and employment but this hides large

variation across countries. The automobile

The automobile industry includes companies that are involved in production of

cars, including their design, testing, manufacturing and sales. In the United States it

includes companies producing light vehicles as this series contains vehicles such as

SUVs (4x4s) that are defined as cars elsewhere. Definitions vary depending on the

series used. Industry accounts for almost 4% of total output in the Czech Republic

and Germany, while it is almost non-existent in several countries. Over 2% of

employed people work in the industry in the large automobile-producing countries.

These numbers understate the size of the automobile-related workforce, as a higher

198

number of people are employed in the automobile value chain e.g. both

downstream, in services such as car financing, insurance and maintenance, and

upstream, in steel and transport.2 In many car-producing countries a large share of

output is exported. Automobile exports represent more than 20% of manufacturing

exports in Japan, the Slovak Republic, Hungary, Canada and Spain, and account for

more than or close to 15% of total exports in these countries. The current structure

of the industry is the result of a long process of structural change which is likely to

have further to go.

Input-output tables allow the quantification of the size of multiplier effects from the

automobile industry to the rest of the economy. These multipliers combine

information on both domestic and import inter-sectoral linkages. They are

estimated to be close to three in G7 countries, i.e. a $1 increase in the value added

delivered by the automobile industry would increase output by $3. This level of

multiplier is at or close to the top of what is observed in other industries, and

always stronger than the average across industry (which is estimated to be at

Focusing on domestic linkages would lead to smaller multipliers but, with the

exception of the United Kingdom and Canada, the automobile industry would

continue to display stronger multipliers than the average across industry.

199

CURENT STATUS OF INDIAN AUTOMOTIVE INDUSTRY

The industry encompasses commercial vehicles, multi-utility vehicles, passenger

cars, two wheelers, three wheelers, tractors and auto components. There are in

place 15 manufacturers of cars and multi utility vehicles, 9 of commercial vehicles,

14 of Two/Three Wheelers and 10 of Tractors besides 5 of engines. With an

investment of Rs.50,000 crores, the turnover was Rs. 59,500 crores in Automotive

Sector during 1999-2000. It employs 4,50,000 people directly and 100,00,000

people indirectly and is now inhabited by global majors in keen contention. 4.2

India manufactures about 38,00,000 2-wheelers, 5,70,000 passenger cars, 1,25,000

Multi Utility Vehicles, 1,70,000 Commercial Vehicles and 2,60,000 tractors

annually. India ranks second in the production of two wheelers and fifth in

commercial vehicles. 4.3 India’s automotive component industry manufactures the

entire range of parts required by the domestic automobile industry and currently

employs about 250,000 persons. Auto component manufacturers supply to two

kinds of buyers – original equipment manufacturers (OEM) and the replacement

market. The replacement market is characterized by the presence of several small-

scale suppliers who score over the organized players in terms of excise duty

exemptions and lower overheads. The demand from the OEM market, on the other

hand, is dependent on the demand for new vehicles. 4.4 The auto sector (excluding

Tractors) attained a steep cumulative annual growth of 22% between 1992 and

1997. The Tractors achieved a cumulative annual growth of 16%. Component

production grew by 28%. There has been a slowdown in the automobile sector in

the past two years. However, the component industry maintained a low but positive

growth rate mainly due to its export performance. Over the years, the component

industry has maintained a 10% - 12% share of exports in the total production. 4.5

Roads occupy an eminent position in transportation as they, as per the present

estimate, carry nearly 65% of freight and 87% of passenger traffic. Although, India

has 3.3 million kilometers of road network, which is the second largest in the

world, the Indian highways are getting overpopulated. Traffic management and

road sense also need attention.

200

NEED FOR A COMPREHENSIVE AUTOMOTIVE POLICY

The extant policy has drawn many overseas companies into India but needs to be

more investor friendly, address emerging problems and be WTO compatible. The

Indian car market is full of possibilities; but present demand profile inhibits volume

production, saves by a few, and conduces contention rather than competition.

World over, the majors have consolidated to elevate technology, enlarge product

range, access new markets, cut costs and in graft versatility. They have resorted to

common platforms, modular assemblies and systems integration by component

suppliers and E-Commerce. The automotive industry is in the midst of a major

structural transformation in today's globalized scenario. "System Supply" of

integrated components and sub-systems is becoming the order of the day, with

individual small components being supplied to the system integrators instead of the

vehicle manufacturers. In the process, most of the SSI units manufacturing smaller

individual components are on their way to become tier 2 and tier 3 suppliers, while

the larger companies including most MNCs are being transformed into tier 1

companies, which purchase from tier 2 & 3, and sell to the auto manufacturers. 5.3

Indian auto sector needs to grow collaterally and in harmony with world industry.

India has the potential to be a global automotive power. However, concerted efforts

will be required to take auto manufacturing to a self-sustaining level where they

shall have volumes, generate requisite technology and meet evolving emission

requirements. 5.4 Volume is important for any manufacturing enterprise. However,

it is more important for automobile sector, both for the manufacture of vehicles as

well as auto components. Lack of volume will not only inhibit efficient

manufacture but also R&D and introduction of new models. The investment and

fiscal policies should create an environment for volume production and indigenous

capability for innovation for small cars and auto components. It should be possible

to achieve an export target of US $ 1 billion by 2005 and US $ 2.7 billion by 2010.

The would require three pronged marketing strategy: exports through OEMs for

their global sourcing requirements, export to tier I manufacturers as a part of their

international supply chain and direct exports to aftermarket. The main challenges

are lower volume – low scale, fragmentation, inadequate R&D/technology support,

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lower productivity levels, limited resources for international marketing and

establishment of an efficient supply chain.

MEASURES TO REALIZE THE POLICY OBJECTIVES

Initiatives relating to investment, tariffs, duties and imposts will be the instruments

to achieve the Policy objectives. These path government’s economic reform and are

in harmony with the commitments made to WTO. Increased resource allocation to

the highways sector to ensure collateral upgradation and development of road

infrastructure in step with the increase in the population of vehicles. 6.3 An

appropriate regulatory framework for smooth movement of traffic, safety and

environmental aspects.

FOREIGN DIRECT INVESTMENT

Automatic approval for foreign equity investment up to 100% of manufacture of

automobiles and component is permitted.

IMPORT TARIFF

The incidence of import tariff will be fixed in a manner so as to facilitate

development of manufacturing capabilities as opposed to mere assembly without

giving undue protection; ensure balanced transition to open trade; promote

increased competition in the market and enlarge purchase options to the Indian

customer. The Government will review the automotive tariff structure periodically

to encourage demand, promote the growth of the industry and prevent India from

becoming a dumping ground for international rejects. In respect of items with

bound rates viz. Buses, Trucks, Tractors, CBUs and Auto components,

Government will give adequate accommodation to indigenous industry to attain

global standards. 8.4 In consonance with Auto Policy objectives, in respect of

unbound items i.e., Motor Cars, MUVs, Motorcycles, Mopeds, Scooters and Auto

Rickshaws, the import tariff shall be so designed as to give maximum fillip to

manufacturing in the country without extending undue protection to domestic

industry. The conditions for import of new Completely Built Units (CBUs), will be

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as per Public Notice issued by the Director General Foreign Trade (DGFT) having

regard to environment and safety regulations. Used vehicles imported into the

country would have to meet CMVR, environmental requirements as per Public

Notice issued by DGFT laying down specific standards and other criteria for such

imports. Appropriate measures including anti-dumping duties will be put in place

to check dumping and unfair trade practices.

EXCISE DUTY

The ownership of cars in India is just 6 per thousand of population as against 500 in

the developed economies. The contribution of the auto sector to the GDP and

employment is likewise low. Expansion of local demand holds great potential and

is vital to install scale volumes of production. Domestic demand mainly devolves

around small cars not exceeding 3.80 meters in length. Small cars occupy less of

road space and save on fuel. These capture more than 85% of the market. India can

build export capability and become an Asian hub for export of small cars. The

growth of the segment needs to be spurred. Multi Utility Vehicles 9.2.1 MUVs are

an important mode of economical mass transport in rural India due to poor road

infrastructure and lack of good State transport system. They are the first vehicle

purchased by a number of farmers, traders, small businessmen in rural and semi-

urban markets. The Government will endeavor to provide fiscal incentives to the

sector. Commercial Vehicles presently excise duty on commercial vehicles sold by

a manufacturer whether as a chassis or with a complete body is 16%. However, no

duty is levied on the body that is built by an independent body builder on chassis

bought from a manufacturer. The dispensation inveigles production of the complete

trucks and buses by the chassis manufacturer and is detrimental to safety standards.

The duty imposed on the construction of bodies by an independent body builder,

small or organized sector, shall be equal to that of bodies built by a chassis

manufacturer. The Government will encourage fabrication of bus body on bus

chassis designed for better passenger comfort instead of truck chassis as is the

current practice. The Government will promote the use of multi-axle vehicles for

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carriage of goods as they cause reduced environmental pollution and lesser wear

and tear on road surface in comparison to the existing 2-axle trucks.

IMPROVING ROAD INFRASTRUCTURE

Traffic on roads is growing at a rate of 7 to 10% per annum while the vehicle

population growth for the past few years is of the order of 12% per annum. Poor

road infrastructure and traffic congestion can be a bottleneck in the growth of

vehicle industry. A balanced and coordinated approach will be undertaken for

proper maintenance, upgradation and development of roads by encouraging private

sector participation besides public investment and incorporating latest technologies

and management practices to take care of increase in vehicular traffic. 10.2 For the

convenience of traveling public the Government shall also promote multi-modal

transportation and the implementation of mass rapid transport systems.

INCENTIVE FOR RESEARCH AND DEVELOPMENT

The Government shall promote Research & Development in automotive industry

by strengthening the efforts of industry in the direction by providing suitable fiscal

and financial incentives. The current policy allows Weighted Tax Deduction under

I.T. Act, 1961 for sponsored research and in-house R&D expenditure. The will be

improved further for research and development activities of vehicle and component

manufacturers from the current level of 125%. In addition, Vehicle manufacturers

will also be considered for a rebate on the applicable excise duty for every 1% of

the gross turnover of the company expended during the year on Research and

Development carried either in-house under a distinct dedicated entity, faculty or

division within the company assessed as competent and qualified for the purpose or

in any other R&D institution in the country. The would include R & D leading to

adoption of low emission technologies and energy saving devices. Government will

encourage setting up of independent auto design firms by providing them tax

breaks, concessional duty on plant/equipment imports and granting automatic

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approval. Allocations to automotive cess fund created for R&D of automotive

industry shall be increased and the scope of activities covered under it enlarged.

ENVIRONMENTAL ASPECTS

The automotive and oil industry have to heave together to constantly fulfill

environment imperatives. The Government will continue to promote the use of low

emission fuel auto technology. The Government after considering the

recommendations of the Expert Committee on Auto Fuel Policy headed by Dr.

R.A. Mashelkar, have approved a road map for implementation for the auto fuel

quality consistent with the required levels of vehicular emissions norms and

environmental quality. The Government will formulate a comprehensive auto fuel

policy covering the other related aspects and ensure availability of appropriate auto

fuel/fuel mixes at minimum social costs across the country. Suitable institutional

mechanism will be put in place for certification, monitoring and enforcement of

different technologies/fuel mixes. Appropriate fiscal measures will be devised to

achieve milestones in the roadmap for implementation of auto fuel policy. In the

short run, the Government will encourage the use of short chain hydrocarbons

along with other auto fuels of the quality necessary to meet the vehicular emissions

norms. There is prime need to support the development and introduction of

vehicles propelled by energy sources other than hydrocarbons by promoting

appropriate automotive technology. Hybrid vehicles and vehicles operating with

batteries and fuel cells are alternatives to the conventional automobile, which in

their early beginnings, lie in treasured. As an impetus for the development of such

vehicles, an appropriate long-term fiscal structure shall be put in place to facilitate

their acceptance vis-à-vis vehicles based on conventional fuels. Internationally, the

practice is to levy higher road tax on older vehicles in order to discourage their use.

In India, the road tax on vehicles varies in nature and quantum among the states.

Lifetime road tax is also in vogue. The endeavor will be to move to the

international model. 13.6 In order to facilitate faster upgradation of environmental

quality, the Govt. will consider having a terminal life policy for commercial

vehicles along with incentives for replacement for such vehicles.

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SAFETY

Government will duly amend the Central Motor Vehicles Rules, Bureau of Indian

Standards (BIS) and other relevant provisions and introduce safety regulations that

conform to global standards. Testing and certification facilities need to be revised

and strengthened in accordance with safety standards of global order. Government,

in partnership with industry, will tend to the requirement.

BUILDING BYE LAWS FOR RESIDENTIAL, COMMERCIAL AND

OTHER USES

With the growth of vehicles, smooth traffic movement has come under severe

strain. The problem has been aggravated because of inadequate provision of

parking facilities generally. Starting with metropolitan and important towns, the

Government will pursue with State Governments and Local bodies amendments to

by laws for upward revision of the parking norms for new residential buildings,

construction of common parking for existing residential areas besides parking

upgradation in all commercial areas. Multi-storied parking shall also be

encouraged.

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The “Yuvraj -215”

CASE STUDY

About 80%+ of India’s farmers are marginal or small farmers who cultivate land

holdings that are small and not amenable to mechanization. Productivity from these fields are low.

For Indian agriculture to progress, it is vital that yields from these fields are raised and farm incomes

grow.

The introduction of technology – of which mechanization is a critical part –into

these fields is the most critical driver of farm prosperity.

After extensively researching this segment,

Mahindra’s Farm Equipment Sector had a brainwave : Why not develop a tractor

that costs as much a pair of Bullocks traditionally used to work the land, thereby enabling a

quantum leap in farm productivity? Thus was born the “Yuvraj-215”, a tractor that is driving

unheard of increase in farm productivity on these small plots of land in rural India

The Yuvraj competes in a segment dominated by the unorganized sector and

no other branded tractor caters to the needs of the customers. The Yuvraj-215 is a low cost, and

economical-to-operate tractor, backed by the reliable and trusted Mahindra brand.

However, the task of developing such a tractor was formidable – the cost of the

tractor had to be kept low enough to make it affordable while at the same ensuring that farmers get

the performance levels they expect. Mahindra’s R&D team took up this challenge. They captured

farmer’s insights and conceptualized a product which stands apart in terms of power, speed, fuel

consumption, aesthetics, position and draft control and a small turning radius.

Concept approaches ranged from “A day in a farmer’s life”, keeping in mind

the rational, functional and emotional needs of the customer. Brainstorming on cost saving ideas

was conducted during initial design concept finalization. Also an aggressive sourcing strategy and

contract manufacturing concept was used to keep the cost of the tractor as low as possible.

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And in a market where an indigenous 9 HP (Horse Power) Tractor costs Rs.2.0

lakhs (~$4,500), the Yuvraj-215, a 15 HP tractor, introduced a year ago costs Rs.1.75 lakhs

(~$4,000). The response to the tractor has been so overwhelming that it is proving to be extremely

challenging to meet demand.

The Yuvraj-215 is a much awarded product and has been honored with the

“Golden Peacock Award

2010” in the innovative product and services category.

The Yuvraj-215 is a shining ability of our ability to think alternatively and make a

difference to the lives of our customers

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CONCLUSION

Mahindra & Mahindra Ltd. and Ssangyong Motor Company Limited (SYMC) have

signed a definitive agreement containing information related to securing outside

investment, the establishment of principal management, repayment of rehabilitation

claims to protect the interests of creditors, such as creditors and shareholders, and

establishing a foothold for SYMC normalization.

The total cost of acquisition is US$ 463 million with US$ 378 million in new stock

and US$ 85 million in corporate bonds. Mahindra will acquire a 70% stake, and the

deal is expected to be concluded by March 2011.

The agreement was signed in Seoul by Mr. Yooil Lee and Mr. Youngtae Park, Joint

Receivers of SYMC and Dr. Pawan Goenka, President, Automotive & Farm

Equipment Sectors, M&M, in the presence of key staff and advisors to both groups.

SYMC has been undergoing a corporate rehabilitation process since February 2009

and the court receivership will conclude upon court approval and the termination of

corporate rehabilitation process.

The labour union of SYMC, M&M and SYMC have also signed a Tripartite

Agreement which contains provisions for employment protection, long-term

investment and commitment for no labor dispute.

"The securing of a solid partner who has both financial capability and is engaged in

diverse markets will allow Ssangyong to emerge as a global SUV player through

the strengthening of R&D, investments in product development, better business

competitiveness and global sales expansion", said Mr. Yooil Lee.

"The coming together of Mahindra and Ssangyong will result in a competitive

global UV player. Together with its financial capability, Mahindra offers

competence in sourcing and marketing strategy while Ssangyong has strong

capabilities in technology. We are committed to leverage the combined synergies

by investing in a new Ssangyong product portfolio to gain momentum in global

markets", said Dr. Pawan Goenka.

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Dr. Goenka added, "There is also an opportunity to introduce a premium portfolio

of SUVs in the Indian market, providing a new growth avenue for Ssangyong and

further strengthen our dominant position in the UV segment."

The definitive agreement also encapsulates terms and conditions related to the

process of acquiring new stock and corporate bonds, down payment and deposit

guidelines, repayment of rehabilitation claims, employment guarantees, and other

covenants. M&M has already deposited 10 percent of the final purchasing price per

terms of the definitive agreement, with the remaining balance to be deposited three

days prior to SYMC’s stakeholder meeting. SYMC will update its corporate

rehabilitation plan to include reference to repaying liabilities with cash-in from the

deal, and will be required to receive approval from creditors and the court on the

updated plan. After completing all the acquisition procedures and the repayment of

rehabilitation claims, the corporate rehabilitation process is likely to be finished by

March, 2011.

Mahindra is committed to nurturing the Ssangyong brand in global markets while

preserving its Korean heritage. It is intended that SYMC will continue to function

as an independent entity with primarily a Korean management. The acquisition will

offer financial stability to SYMC and the two companies will work to further

strengthen Ssangyong’s product portfolio across the globe. The inherent strengths

of Ssangyong combined with Mahindra’s expertise will help in building a global

SUV major.

.

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