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Thread: M&M infuse Rs 500 crore into business, step up efforts to capture two-wheeler market.

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    Thumbs up M&M infuse Rs 500 crore into business, step up efforts to capture two-wheeler market.

    M&M infuse Rs 500 crore into business, step up efforts to capture two-wheeler market


    My Summary of the article: M&M infuses Rs 500 crore into 2 Wheeler business, in efforts of a bigger market share. This infusion would be spread out to all departments- R&D to shop floor to new products.
    As a first step, a new assembly line at Pithampur plant is started already, for motorcycles and scooters. A future product portfolio plan is already created and being worked upon. All important segments (100-300cc) are being worked upon.

    Even though Engines Engineering is now sold by Mahindra to its former owner, but the Italian firm will offer support for Mahindra's future products. The R&D inherited from Kinetic was very dated, with its specialty limited to certain segments. Its now being revamped accordingly. The Company is being very realistic now. Now their mantra is, "researching in India, designing in India and selling in India". Could this be due to Mojo's design largely being not accepted?

    From being perceived as a SUV/ MUV maker, Mahindra is looking for a more expanded identity.


    --
    Article: MUMBAI: Preparing for the long haul, India's largest utility vehicle major, Mahindra and Mahindra is taking a fresh guard by rejigging its entire two-wheeler business - from the shop floor to R&D, from distribution to introducing a slew of new products in a bid to capture a slice of one of the world's fastest growing two-wheeler market.

    Anoop Mathur, president, two wheeler division, Mahindra & Mahindra told ET, "We have been and will continue to invest in the two wheeler industry. Over the last couple of years we have significantly strengthened our fundamentals like a cutting edge R&D facility and upgraded manufacturing capacity."

    A year and half after withdrawing its first motorcycle Stallio from the domestic market due to engineering glitches, ET learns, the company has restructured its entire business right from its R&D, manufacturing, marketing set up and its product portfolio for the future.

    M&M is infusing over Rs 500 crore of fresh funds into the two wheeler business, which will go into setting up of a strong domestic R&D centre led by P S Ashok, development of new products and has already set up an all new assembly lines for scooters and motorcycles at its Pithampur plant with a capacity of 1 million units.

    Under P S Ashok, who was the key man behind LML two wheeler business, the company has already set up a strong team of 160 engineers, which it claims is the third largest R&D set up in the country in the domestic 2 wheeler industry

    Viren Popli, senior VP, strategy & market development, two wheelers, Mahindra & Mahindra in an interaction with ET said, the company has already got approval from the board on the future investment and they have a product portfolio plan in place of 10-12 vehicles which will be across categories, as part of its mission statement till 2015-16.

    And this is just the first of several moves the company is planning.

    The company plans to re-launch Stallio in the next few months and has 3 more products including another motorcycle and scooter in the offing in FY-13, which will help the company build its falling volumes. Mojo, the premium motorcycle too should be launched in 12-18 months time.

    The company inherited a dated R&D set up from Kinetic acquisition and over the years it put together an Ecosystem of international R&D companies, which the company now admits, didn't work.

    "We were quiet for more than a year, as we were busy putting in place the infrastructure required for future growth. Having an international R&D capability alone was not enough we needed the strong in-house capability which have now put in place. Translating international design for Indian use needed a lot of work, which was one of the challenges we had with the Stallio. We are now designing in India for India," said Popli

    M&M acquired the Kinetic Motors in 2008 for an acquisition price of approximately Rs 100 crore, but since then it has infused over Rs 500-800 crore in the business, yet it is incurring losses. Mahindra Two Wheelers posted a loss of Rs 169.21 crore in 2010-11 and it is piling. In FY-12, M&M sold about 1,34,750 units of Rodeo, Duro, Flyte which was a decline of 17.8% versus an industry growth of 15.27%

    Engines Engineering, the engineering firm it acquired to support two wheeler biz was recently bought back by its former promoter, Alberto Strazzari earlier in the year. The Italian firm will however continue to offer support in M&M's future product portfolio strategy.

    The company is aiming to be present across all segments (100 to 300 cc), but unlike the past, it is very realistic on the volumes today and sees itself as a niche player to begin with. And within those niches, it sees a great opportunity to sell to women and the youth.

    Popli says, women buying two wheelers is a very interesting trend and it is something that his scooter business loves. "It is the fastest growing segment and makes up for 40% of the scooter market or 8,00,000 units. And in women, you have to look further down into what women, there are housewives, working professionals, college students and they all have different needs and we are designing to their needs."

    And it is investing huge amount of money on on-ground research, wherein it speaks to at least 200-500 people every week to get an understanding of the market. The new Duro DZ has features like raised handlebar, powerful headlamp, side stand lock all incorporated post an extensive research.

    Popli says unlike the other two wheeler makers, he does not have the luxury of picking up product from the international portfolio and launch it here. "For me, I am researching in India, designing in India and selling in India."

    The company has also restructured its marketing department which now works very closely with the R&D team unlike the past. The new product development team has a representative from both marketing and R&D functions, which helps in reacting to the market needs faster.

    Experts say any new entrant who enters a competitive segment like two wheelers will always take time to establish in India and M&M is no different.

    "It takes time for a new comer to create their own space in the market. The market is growing and there is space for everybody. What is the key for success in the mid to long term is to have a product portfolio strategy, where one offers value and a distribution reach," says Abdul Majeed, leader, automotive practice, Price Waterhouse

    The automotive marketing expert Pradeep Saxena from TNS Automotive believes M&M two wheeler brand has a relatively lower top of mind awareness.

    "It is a challenge for M&M to create a distinct identity in the two wheeler space considering that everyone else like Hero, Honda and Bajaj has a relatively long history in India where Mahindra two Wheelers is just four years old. Apart from competing against these brands outside, it also has to create a distinct identity within the mother brand Mahindra, which has a strong image as a SUV/MUV maker," said Saxena.

    M&M already has 400 dealerships, and with the motorcycles coming, it is adding 100 more dealers which will be largely in smaller cities and rural areas. With new product launches, entry in motorcycle and expanding reach it is hopeful of selling 1 million units in three-four years time.

    "For M&M, the two-wheeler business is a marathon race. However when I say niche in the short term, I don't mean 1, 00,000 units kind of numbers, probably in every category we see at least 2,00,000 to 3,00,000 units numbers or may be more," added Popli.


    Source: M&M infuse Rs 500 crore into business, step up efforts to capture two-wheeler market - The Economic Times

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    so .. what to expect from them....any ideas and when...??

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    Quote Originally Posted by princesirohi View Post
    so .. what to expect from them....any ideas and when...??
    Since they mentioned "300cc" as a segment, many journalists are expecting them to work on the Mojo, which was announced but held back before its release, due to mass non-acceptance of looks.

    Mojo was really hated the most around the web, for its "matured" kind of design. And they were right to an extent. I mean, would you like the bike below?:-->








    Now, analyze these statements by the company personnel:

    "Translating international design for Indian use needed a lot of work, which was one of the challenges we had with the Stallio. We are now designing in India for India"

    "For me, I am researching in India, designing in India and selling in India."


    Its clear how they're pointing out that international designs (for mature markets like Europe) have to be "translated" for Indian market. Which means Mojo could get a redesign and relaunch.

    -
    Apart from Mojo, we heard about some 135cc and 150cc commuting platforms based on the Stallio, but since the Stallio itself was not accepted by public (250 units/ month only, back then.) and ultimately refined and relaunched, then these 135/150cc releases never saw the light of the day. But they might now...

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    well, if they had the basics right, i mean- engine and chassis of that insect looking 300 CC, "adapting" that to indian tastes should take not more than six months. but i doubt about that basics being right.

    after all indian tastes are not very different from other countries, see KTM200, CBR250, CBR150, R15, HYosung bikes, Ninja 250 & 650, none of them are disliked for looks and are generally accepted.

    its just that you must not design a bike that will be hard to accept in most parts of the world.

    lets hope they bring in a 300 CC soon.

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    Quote Originally Posted by princesirohi View Post
    well, if they had the basics right, i mean- engine and chassis of that insect looking 300 CC, "adapting" that to indian tastes should take not more than six months. but i doubt about that basics being right.

    after all indian tastes are not very different from other countries, see KTM200, CBR250, CBR150, R15, HYosung bikes, Ninja 250 & 650, none of them are disliked for looks and are generally accepted.

    its just that you must not design a bike that will be hard to accept in most parts of the world.

    lets hope they bring in a 300 CC soon.
    Basics were more or less right I think, because it was an Italian development by another firm, and was tested on racetracks. It made some 24 bhp @ a medium 7500 rpm, which did suggest road based tuning of the engine.

    Its hard to explain why, but people including me do like Duke, CBR, etc. but somehow not the Mojo. Another strange thing was that despite being a single cylinder, it had 2 exhausts, one on each side. This was another first from Mahindra, I think for a single cylinder bike.

    As for 6 months, well, when nothing was going good for the company including Stallio and other products, how could they have hurried up the launch? Now times are better when their scooters are generating some money...

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    hmmnnn.. lets just hope that M&M succeed and we get more options in future.

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