Mahindra & Mahindra †Sm Essay

1. EXECUTIVE SUMMARY Indian AUTOMOBILE INDUSTRYStarting its tour from the sidereal day when the offset aboveboard machine rolled on the streets of Mumbai in 1898, the Indian railway car assiduity has demonst regularized a phenomenal ontogeny to this day. Today, the Indian motor gondola perseverance presents a galaxy of varieties and models chanceing either viable confrontations and sphericly effected effort standards. Some of the prima(p) label echoing in the Indian go perseverance include Maruti Suzuki, Tata powerfulness backs, Mahindra and Mahindra, Hyundai repulses, Hero Honda and Hindustan forces in fetch break offum to a number of former(a)s. During the early stages of its let onment, Indian automobile exertion heavily depended on contrasted technologies.However, oer the comp championnt parts, the manufacturers in India groom in started utilize their aver technology evolved in the native soil. The thriving mart place power in the lan d has attracted a number of automobile manufacturers including nigh of the re regulateed spherical attractions to differentiate their break up in the soil looking foregoing to sharpen their profile and prospects to unfermented heights. Fol littleing a brief setback on account of the human beings(prenominal) scotch recession, the Indian automobile commercialize has once again picked up a remarkable caprice witnessing a buoyant exchanges event for the -first time in its muniment in the month of September 2009. At present, virtually 75 percent of Indias automobile assiduity is wee up by small rail political machines, with the imagine ranking the nation on upside of whatever other(a) rude on the globe.Over the conterminous 2 or terzetto age, the country is expecting the stretch of much than than a dozen forward-lookingborn give aways do jam car models. Like umpteen other nations Indias senior highly develop transportation establishment ha s played a very important manipulation in the instruction of the countrys parsimony every(prenominal)where the chivalric to this day. One loafer aver that the automobile industry in the country has employed a solid space in the curriculum of Indian economy. Empowered by its present addition, at onceadays the automobile industry in the country can produce a diverse range of fomites down the stairs three broad categories namely cars, two- bicyclers and heavy fomites. 1.1. Exports of go IndustryToday, India is among the domains largest producers of small cars. The unfermented York sentences has rated India as a very unassailable engineering base with an incomparable expertise in the atomic number 18na of manufacturing a number of low- embody, arouse- efficacious cars has encouraged the e crusadeateness plans of the manufacturing facilities of a number of automobile drawing cards hand Mahindra, Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki. art object the automobile industry in India is the 9th largest in the humankind, the country emerged as the four-spotth largest automobiles exportationer on the globe following Japan, southern Korea and Thailand, in the year 2009. The automobile celestial sphere of India is the seventh largest in the world. In a year, the country manufactures rough 2.6 one thousand million cars crop up an identifiable chunk in the worlds annual out flummox of roughly 73 zillion cars in a year.The country is the largest manufacturer of motorcycles and the fifth largest producer of technical fomites. Industry experts puddle visualized an unbelievably wide make up in these figures all everyplace the immediate upcoming. The figures published by the Asia sparing Institute indicate that the Indian automobile vault of heaven is set to emerge as the global leader by 2012. In the year 2009, India rose to be the fourth largest exporter of automobiles following Japan, South Korea and Thailand. Expert s state that in the year 2050, India ordain top the car record books of all the nations of the world with close 611 million cars kick the bucketning on its roadsteadtead. 1.2. Various Segments of the Indian Automobile Industry Motor cycles manufacture give aways up the study divvy up in the two-wheeler member of theIndian automobile industry. near 50% of the motorcycles argon manufactured by Hero Honda.While Honda manufactures slightly 46% of the scooters, TVS produces 82% of the mopeds running on the Indian roads. About 40% of the three-wheelers manufactured in India are used for transporting h peerlesssts with Piaggio manufacturing 40% of the fomites interchange in the Indian grocery. On the other hand, Bajaj has emerged as the leader in manufacturing three-wheelers used for rider transport. The firm produces about 68% percent of the three wheelers used for rider transport in India. The Indian passenger vehicle fraction is dominated by cars which make up about 80 % of it.Maruti Suzuki manufactures about 52% of passenger cars objet dart the firm enjoys a complete monopoly in the manufacture of multi-purpose vehicles. In the replete(p) vehicles segment Mahindra makes up a 42% share. Tata Motors is the leader in the Indian commercial vehicles commercialise while it holds more than than 60% share. Tata Motors likewise enjoys the credit of being the worlds fifth largest manufacturer of medium and heavy commercial vehicles. 1.3. Potential of Indian Automobile Industry in that obedience is a very stiff competition in the automobile industry segment in India. This has answered m some(prenominal) to realize their dreams of driving the near luxurious cars. During the young aside, a number of everyplaceseas companies mother started grabbing a big chunk of the market share in both house servant and export gross sales. invariablyy sensitive-fashi mavind day dawns in India with some spic-and-span provees by active players in the India n automobile arena. By introducing some low cost cars, the industry had made it possible for common men to buy cars for their personalized use.With some installational strategies and by adopting some substitute remedial mea trues, the Indian automobile industry has successfully come unaffected out of the global fiscal crisis. During the current fiscal year, the Indian automobile industry rode high on the resurgence of consumer beseech in the country as a burden of the goernings fiscal stimulus and attractively low interest rates. As a result the add tearover of the home(prenominal) automobile industry ontogenesis by about 27 per cent. Predictions made by Ernst and Young contrive estimated that the Indian passenger car market testamenting have a process rate of about 12 percent per annum over the next five-spot years to pass water the achievement of 3.75 million units by the year 2014.The analysts have save stated that the industrys turnover depart touch $155 mi llion by 2016. This action impart succeed in consolidating Indias countersink as the seventh largest automobiles manufacturer on the globe, eventually surging forth to become the third largest by the year 2030 behind China and the US. The Automotive committee Plan effectuateed by the Indian government has envisaged that the country give emerge as the seventh largest car maker on the globe thereby contribute more than 10 percent to the nations $1.2-trillion economy. Further, industry experts believe that the nation will before farseeing establish its stand as an automobile hub trade about 2.75 million units and staging about a million units to be operated on the municipal roads 1. MAHINDRA & MAHINDRA OVERVIEWMahindra & Mahindra (M&M) is non just Indias largest do vehicle manufacturer anymore. It is the third-largest player in the passenger vehicle segment and in a neck-and-neck race with Tata Motors. It has set its sight on challenging the domination of Maruti Suzuki and Hyundai Motors. Pawan Goenka, as president for automotive and develop equipment sectors, is the main couturier of this feat Mahindra and an in low-level India began their bear to gear upher.In 1945, two enterprising brothers named J.C. Mahindra and K.C. Mahindra joined forces with Ghulam Mohammed and started Mahindra & Mohammed as a marque ac participation in Mumbai. Two years later, India win its independence, Ghulam Mohammed left the caller-out to become Pakistans first finance minister, and the Mahindra brothers ignited the bon tons stomach emersion with their decision to manufacture Willys jeeps in Mumbai.The Mahindra brothers believed that new modes of transportation could be a come upon to Indias turnity, so one of their first goals was to build rugged, simple vehicles capable of tackling the Indian terrain. Early pioneers of globalization, the brothers collaborated with a unsubtle range of internationalist companies and before large, Mahindras cut into ex tended to steel, tractors, telecom, and more.Now, after 65 years, Mahindra has grown from a humble local outfit to a US $15.4 billion corporation employing more than 144,000 sight or so the world. Its been quite an ad casualty so far, and theyre proud of our global leadership in service program vehicles, tractors, and information technology, as comfortably as our portentous presence in financial go, leisure and hospitality, engineering, trade, and logistics. As they accelerate into the 21st century, theyll a call forthe to pursue innovative ideas that enable people to swot up. Theyve come a long way, but the journey has just begun.Over the past few years, M&M has fly highed into new industries and geographies. They entered into the two-wheeler segment by taking over energizing Motors in India. M&M in like manner has tyrannical stake in REVA galvanic Car social club and acquired South Koreas SsangYong Motor Company in 2011.Mahindra & Mahindra is a major automobile manu facturer of good vehicles, passenger cars, pickups, commercial vehicles, and two wheelers. Its tractors are sold on half a dozen continents. It has acquired plants in China and the unite Kingdom, and has three assembly plants in the USA. M&M has partnerships with international companies exchangeable Renault SA, France and world(prenominal) Truck and locomotive engine Corporation, USA.M&M has a global presence and its crossways are exported to several countries. Its global subsidiaries include Mahindra atomic number 63 Srl. based in Italy, Mahindra USA Inc., Mahindra South Africa and Mahindra (China) Tractor Co. Ltd.M&M made its immersion into the passenger car segment with the Logan in April 2007 beneath 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. M&Ms automotive course makes a wide range of vehicles including MUVs, LCVs and three wheelers. It offer s over 20 models including new generation multi-utility vehicles manage the Scorpio and the Bolero. It in one case had a joint venture with intersection called Ford India Private curb to build passenger cars.Mahindra & Mahindra has a cont coil stake in Mahindra Reva galvanizing car Vehicles. In 2011, it excessively gained a controlling stake in South Koreas SsangYong Motor Company. Mahindra & Mahindra Ltd. (M&M), has projected its much wait SUV, XUV 500, code named as W201 in September2011. The buy the farm 500 in the name is pronounced as 5 double-O (alphabet). 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.2. MISSION AND OBJECTIVES resourcefulness* To create a fully collaborative surroundings in which suppliers can deliver exactly what the ships companion need, when it needs it, and at a competitive cost. * We siret have a group-wide mission statement. Our hollow pu rpose is what makes all of us lack to get up and come to clear in the daybreak -Anand Mahindra Mission* To create Indias largest automobile and automobile-related products statistical distribution realisework by providing dealers and customers with the largest choice of unique maiden products and services.Since 1945, the Mahindra group has built the family slightly the essence idea that people will succeed if they are just given the opportunity. Employees across the grouping everlastingly contest conventional thinking to create solutions that make a epochal difference in the lives of their customers. Thats why everything they buildbe it a tractor, financial service, solar-powered lamp, or softwareis designed to empower you to r apiece your potential.Internally, they follow three basic te crystallises take aiming no limits, thinking or else, and driving substantiating change in everything they do. These mail pillars guide all their actions and railway line decisions f rom decision making whether or not to enter a new field or preparation a portfolio of services.* We accept no limits, and ask the same of everyone else. In return, they work relentlessly to bring home the bacon the tools, information, and inspiration to push past limitations and comfort zones. This challenger spirit galvanized us to meet the oil crisis in the 1970s by re-engineering our fuel efficient tractor engines for utility vehicles. It led us to take on the challenge of designing the Scorpio utility vehicle at a cost that many industry expertsthought was impossibly low.Theyve created completely new melody models to enter areas others had written off or ignored, like our leading hospitality business organization and our bucolic financial services. And they just registered our highest ever gains condescension the hit global recession since the Great Depression. This de frontierination influences every aspect of our culture and our employees. As a result, each Mahindra bu siness constantly pushes the envelope and raises the bar as they strive to deliver better value to our customers.* substitute thinking means solving problems in slipway no one has thought of before, by using fewer resources and entering markets thought to be unreachable. institute the Scorpio for examplethey developed our best-in-class utility vehicle from the dirt up using a process that put fetchrs needs first. Our Energy Solutions help businesses keep passing when everyone elses lights go out. They build two wheelers that provide affordable mobility solutions to more people. And our extensive arrays of innovative IT services are increasing productivity at some of the worlds leading companies. Thinking alternatively isnt unendingly easy, but its always worth it.* Driving Positive Change Mahindra is a business with a conscience. Every product they make and each market they explore must make sound economic sense, but it just so discovers that smart business decisions are oft en good for people and communities as good. They strive to spread confident(p) impact finished our products and services by one thousand our manufacturing process and by being a good employer. They want to be counted among the global companies that make unbelievable products and services, but they similarly wish to be recognized for creating a better world.From building verdancy homes with the nearly eco-friendly significants to providing loans to rustic entrepreneurs, from designing goods carriers that run on matt natural gas (CNG) to offering educational programs and musical accompaniment Indian theatre, they strive to make a positive impact on all the lives they touch They created a tractor designed for small farming that is enabling farmers to mechanise for the first time.Our motivation to give our best every day comes from our total purpose we will challenge conventional thinking and innovatively use all our resources to feat positive change in the lives of our s takeholders 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 they 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 sustainabilitysocial, economic, and environmentalrests upon a set of core values. They are an conjugation of what they have been, what they are, and what they want to be. These values are the hold that guides our actions, both personal and bodily. They are* Good corporate citizenship They will continue to seek long destination success in alignment with the needs of the communities they serve. They will do this without compromising on ethical business standards.* Professionalism They have always sought the best people for the job and given them the freedom and the opportunity to grow. They will continue to do so. They will support innovation and well reasoned risk taking, but will pick out performance.* Customer first They exist and prosper totally if be suit of clothes of the customer. They will respond to the changing needs and expectations of our customers speedily, courteously and effectively.* Quality focus Quality is the key to delivering value for money to our customers. They will make forest a driving value in our work, in our products and in our interactions with others. They will do it First Time Right.* Dignity of the soul They will value individual dignity, upholdthe right to express dis covenant and respect the time and efforts of others. Through our actions, they will nurture fairness, trust, and transparency.3. ram Analysis4.1 Strengths* Mahindra has been one of the squareest brands in the Indian automobile mark. * Mahindra group give employment to over 110, 000 employees. * delicate branding and advertising, and low after sales service cost. * Sturdy SUVs good for Indian roads and off-road terrain. * Over the years the company has emerged as one of the top players in the world in monetary value of number of tractors sold. This gives a clear indication that the companys market shares one of its biggest strengths.* The companys ability to introduce new products in the market and to generate sales from those new products is a major strength. * The reason being that this is very essential for any company, for its survival in the long run. The company has found its brand name in other countries of the world as well. * This is evident from the 40% market share that it holds in the 30-40 HP tractors market in the US. 4.2 impuissance* Mahindras partnership with Renault did not live up to international quality standards through their brand Logan. * The company is highly dependent on the unsophisticated sector, and the rustic sector in turn is highly dependent on the monsoons. As a result, if there happen to be bad monsoons (less of rains) for two consecutive years it could have an adverse impact on the look at of tractors for the company. 4.3 Opportunity* Developing hybrid cars and fuel efficient cars for the futurity. * Tapping emerging markets across the world and building a global brand. * Fast growing automobile market.* emergence in the market through galvanisingalal car Reva (controlling stake) and entry into two-wheeler segments. * The government has been trying to modulate the exports of bucolic products. As a result, the quality of agricultural products needfully has to be very high. For this, they need better rural and agricultural infrastructure.This might result in anincrease in demand for tractors. * In India, the penetration of tractors is 10 tractors per century0 hectares of cropped area, which is much below the world average of 19 tractors for the same. Thus there is scope for the demand to inc rease. 4.4 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. * The company has a chronicle of having clotheed in unrelated diversifications such as telecom, vacation and resort inns, financial services, etc. which it has hived off as subsidiaries from time to time when these turned unmanageable. * This is a cause for concern as such diversifications could divert the companys attention from its core business. It is a insecure tendency as it leads to destruction of shareholders value. * The entry of foreign players in the tractors segment could pose a nemesis to the company as these foreign players are technically more competitive than Mahindra & Mahindra.4. ACQUISITIONS5.1 Ssangyong Motor CompanyIndias Mahindra & Mahindra Ltd. completes eruditeness of a majority stake in SsangYong Motor Company On March 15, 2011, Mahindra & Mahindra Ltd. (M&M), Indias leading manufacturer of utility vehicles, today proclaimed that it has completed all formalities related to the erudition of a majority stake in SsangYong Motor Company (SYMC) and that the company is no longer in Court Receivership. Mahindra had emerged as the preferred bidder for SsangYong in idealistic 2010. This marks the beginning of a new journey for SYMC and will also pave the way for both Mahindra and SYMC to emerge as a strong force allied together in the global passenger vehicle industry, through their strategic partnership. Present on the occasion were Mr. Bharat Doshi, Executive Director & Group CFO, Mahindra & Mahindra Ltd. and Dr. Pawan Goenka who is chairwoman of Mahindras Automotive and Farm Equipment Sectors. Key officials from the Mahindra Group and SYMC were also present.For Mahindra, the biggest benefit from this partnershipwill be the opportunity to harness synergies surrounded by the two companies, while protecti ng their respective brand identities and ensuring quality. Towards this end, a synergism Council comprising of senior steering from both companies will be established to ensure focus and delivery of synergies between the two companies. The Council will focus on divers(a) aspects such as global procurement, new car development and business dodge to penetrate international markets. Strategic plans such as the India project which involves innovation the Rexton and Korando-C in India have al create from raw material been kicked off.Also chthonian discussion are opportunities for joint product and technology development and synergy in global operations and barter for. Mahindra has a strong IT system that is being reviewed for suitableness for SsangYong. The company is also considering the possibility of Mahindra Finance conniption up operations in Korea to enhance the sales of SsangYong vehicles. Mahindra has also proposed the following five point schedule for SsangYong * Streng thening the product pipeline.* Harnessing synergies between the two companies.* investiture in the SYMC brand.* Building human resources.* Focusing on financial stability.SsangYong has also proposed the following investments* In 2011, the business plan calls for a 70% investment increase in product development, as compared to last year, at over KRW 200 billion. * Over 40 billion KRW for brand building in Korea a 60% increase over 2010 and an increase in overseas brand investment by over four clock, in 2011.Dr. Pawan Goenka, prexy, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd., mentioned that Mahindra was extremely informed of SYMCs Korean heritage and would only want to enhance it. SsangYong will be an independently run Korean company with largely Korean perplexity and will remain a Made in Korea Brand. He also announced that the new chief executive officer of SYMC will be Mr. Yoo-il Lee, while Mr. Dilip Sundaram from Mahindra will be the new CFO. He also announced the names of the new Board of Directors of SsangYong Motor Company. This is a divide day for all of us at Mahindraas it marks the beginning of what I am sure will be an enduring partnership with SsangYong Motor Company.I would like to thank all the employees of SsangYong as well as the companys creditors for the help and cooperation extended to us during this long process. As one of the countrys premier automotive companies, SsangYong brings with it a full-bodied legacy of R&D and innovation. This legacy, conjugated with the synergies between the two companies in the areas of R&D, product development and platform sharing, will make the have entity of Mahindra and SsangYong a force to reckon with in the global utility vehicle space.They are committed to nurturing the SsangYong brand in both the Korean and global markets and reverting it to its days of glory, said Dr. Pawan Goenka. Mahindra brings with it a great deal of passion, domain expertise and knowledge of the gl obal UV market, as Indias leading utility vehicle (UV) manufacturer. All of us at SsangYong look forward to working(a) closely with the Mahindra team to help develop a new product portfolio and gain momentum in overseas markets, said Mr. Yoo-il Lee, CEO, SsangYong Motor Company. 5.2 REVA voltaic caral Car Co Ltd.Mahindra enters high addition voltaic car segment acquires majority stake in REVA REVA was established in Bangalore in 1994 as a joint venture between the Maini Group of Bangalore, India and AEV LLC of California, US. Its REVA galvanic vehicle was first commercially available in Bangalore in 2001 and in London in 2004, under the G-Wiz brand. REVA is a technology innovator with the largest deployed fleet of galvanic cars in the global market today, available in 24 countries across atomic number 63, Asia and Central and South the States with more than 3,500 of its vehicles on the road and the accumulated information from more than hundred million km of user experien ce. Mahindra & Mahindra Ltd. Today strengthened its position in the electric Vehicles domain with the acquisition of a majority stake in REVA electric automobile Car Co Ltd., Bangalore.REVA Electric Car Co Ltd. will be renamed Mahindra REVA Electric Vehicle Co Ltd. Under the new agreement which was signed today by both the companies, M&M will own 55.2% equity in Mahindra REVA by a combination of equity purchase from the promoters and a fresh equity infusion of over Rs 45 crores (approx US $10 million) into the company. The buyout makes the Mahindra group a strong global player in the electric vehicle space.Postthe buyout, the Board of Mahindra REVA has been re-constituted under the chairmanship of Dr Pawan Goenka, prexy Automotive & Farm Equipment Sectors, Mahindra & Mahindra. The new board includes five no tapes from Mahindra & Mahindra, two from the Maini family, and one from AEV LLC, California (co-founders of REVA). An independent director will be added to the board subsequen tly. Mr. Chetan Maini will continue to play a leading role in Mahindra REVA as Chief of Technology & Strategy and will continue to be on the board. Under its core Sustainable Mobility initiative, Mahindra has been working for the last 10 years on developing green technologies and has demonstrated diesel motor engine engine hybrid technology on the Scorpio and hydrogen Alfa three wheelers. Mahindra has a pilot fleet operate with 100% bio-diesel and was the first to launch micro-hybrid technology in India with around 50,000 such micro-hybrids on the road today.In EVs, over and above the electric three-wheeler Bijlee developed in 1999, it is also currently working on an electric rendition of its mini-truck, Maxximo. Mahindra REVAs EV technology will be adapted for these and other M&M vehicles. nark to strong EV technology will strengthen Mahindras other current sustainability initiatives. REVA is currently trade its products in 24 countries across the world with an boilers suit vehicle population of over 3500, arguably the largest EV fleet globally. REVA recently premiered its next generation electric car models, the NXR and NXG which received an enthusiastic response. Mahindra REVA will now have access to Mahindras vehicle development technology and distribution network, importantly enhancing its ability to launch a state-of-the-art electric vehicle for global markets. Speaking on the acquisition, Mr Anand Mahindra, VC&MD, Mahindra & Mahindra said, With issues such as temper change and carbon footprint taking heart stage globally, eco-friendly transportation becomes the need of the hour.Mahindra already has an established sustainable mobility solutions programme and our association with REVA will only help us further expand our green footprint both in India and overseas. Dr Pawan Goenka, President (Automotive & Farm Equipment Sectors), Mahindra & Mahindra and the newly elected Chairman of Mahindra REVA said, This is a key strategic acquisition for Mahi ndra in its surround towards sustainable mobility. Mahindra and REVA bring together equilibriseary strengths. WithMahindras vehicle engineering expertise, global distribution network, sourcing clout and financing support, REVAs vehicles have the potential to significantly gain in market penetration. Mahindra will also benefit from REVAs EV technology for its own products.Mr Chetan Maini, Chief of Technology & Strategy, of the newly formed Mahindra REVA mentioned, The EV market is poised to grow significantly and they reason that in order to seize the opportunity they demand the resources and experience of a major automotive manufacturer. In Mahindra they have found a company that not only shares our vision of principled and sustainable proceeds but one that also has a study for good corporate governance. As a result of Mahindras investment, Mahindra REVA will be able to scale, introduce and accelerate and so to deliver better products to more customers in more places.5. GROWT H STRATEGYMahindra & Mahindra Ltd (M&M) is the flagship brand of the $12.5 billion Mahindra Group, which operates with a portfolio comprising a wide spectrum of vehicles from two wheelers to heavy trucks, SUVs to school buses. M&M over the years has strengthened its position as one of the countrys premier utility vehicle (UV) and farm Equipment manufacturer with market share of over 50% in UV and 40% in tractors, respectively. It has recently entered 3-wheelers and CV segment. M&M is targeting sale of about 550,000 tractors in FY12E.6.1 Investors RationaleDuring Q2FY12 net sales of M&M surged by 37.6% to 73,068 million from the 53,113 million in the year-ago quarter, compeln by 35.9% and 35.5% development in its automotive and farm equipment segment, respectively. though operating margins for the current fiscal are belike to squelch under pressure under tight liquid state and rising input cost scenario, they expect the revenues of M&M to reach 300-320 billion in the coming two year.At a time, when consecutive rate hikes, high inflationary data, strikes andcostlier fuel prices have crippled the Indian auto sales manufacturers, M&M has emerged as the only automotive player to have beat the slowdown comprehensively with a harvest of 21% in 2011. Considering M&Ms aggressive growth strategies to expand its global footprint with a range of new variants in the four-wheel segment, they expect M&M to mark 11-14% rise in its FY12E sales realization.M&M complement the tag of no. 1 tractor manufacturer in the world in monetary value of volumes, occupying more than 40% of the domestic tractor market. With tractor demand fairly stable despite ongoing economical slowdown, the company is targeting sale of about 550,000 tractors next year. Beside, with the industry providing adapted headroom for growth, they expect sales from the farm equipment segment of M&M to grow 17-18% by the end of FY12. M&M acquisition of SYMC Motors (SYMC) gives the UV product line of the com pany an extension into the reward SUV segment with an established ground in the markets of South America, Russia etc. The management expects 50% volume growth at 113,000-114,000 units for SYMC in CY11 and aims to sell 160,000 units by 2013 and 300,000 units by 2015-16 from the unit.6.2 High volume in tractor segment drives Q2FY12 revenueDuring Q2FY12, M&M net sales surged by 37.6% to 73,068 million from the 53,113 million in the year-ago quarter, driven by 35.9% and 35.5% growth in its automotive and farm equipment segment revenue, respectively. Besides, the operating expenditure of the company increase by 43% to 64,866 million in general due(p) to the increase in raw material cost and employee expenses by 33% and 20% respectively. The strong volume growth across the vehicle and tractors segment despite of a difficult market state of affairs and a tight control on expenses has helped erect the EBITDA by 6.3% to 8,202 million from 7,719 million in the check quarter last year. Further, owing to the sharp rise in the interest and depreciation charges, the net profit margin (NPM) dropped by 375bps to 9.7%.M&Ms standalone net profit at 7,374 million declined 2.8% from 7,585 million in the corresponding period preceding year, due to a foreign exchange loss. The company has suffered a foreign exchange net loss of 320 million, as the rupee fell 8.8% against the dollarin the July-September quarter. difference further, they expect the revenues of M&M to reach 321 billion in the coming two year, making a contribution of 950-980 basis points to its present EBITDA margins.6.3 Robust November sales volume, higher realizations to drive performance in FY12EM&Ms November total sales volume in the automotive segment reported a robust growth of 53% (y-o-y) at 40,722 units, with a significant contribution of 38,159 units from the domestic terrain. A high volume growth of 46% in the passenger Utility Vehicles (UVs) segment led the domestic four-wheeled sales while sales v olume in the three wheeler segment grew 32% during the month. M&Ms UV and three wheeler export during the month also grew 71% at 2,563 units against 1,500 units a year ago.Meanwhile, M&Ms Farm Equipment Sector division reported a 3% fall in tractor sales to 17,527 units in November with domestic sales falling 5% to 16,175 units okay by issues related to the credit flow to the domestic farm sector. The companys tractor export increased 33% to 1,352 units during the month against 1018 units sold to overseas market in the same period prior year.At a time, when consecutive rate hikes, high inflationary data, strikes and costlier fuel prices have badly hampered the Indian auto sales numbers M&M has emerged as the only automotive company to have beaten the slowdown comprehensively with a growth of 21% in 2011. Backed by significant demand for M&Ms premium sports utility vehicle, XUV500, the company is aggressively working to double its production to clear its order backlog of 9,500 units by January 2012. Considering, M&Ms ability to outperform the industry numbers despite strong economic headwinds and its proposed variants in both two-wheeler and four wheeler segment, they expect M&M to mark 11-14% rise in its FY12E sales realization.6.4 Increased focus in the tractor segment to drive M&M growth in FY13M&M complement the tag of no. 1 tractor manufacturer in the world in terms of volumes supported by 1,300 dealers with over 2,200 service points, 7 tractor plants and 1 foundry. The tractor segment has been fairly stable during the ongoing economical slowdown and has registered a growth of 20% in the current fiscal. M&M with more than 40% share in the tractor industry of the country has asleep(p) a long way in keeping pace with the industry growth.The company is targeting sale of about 550,000 tractors next year. Market share movements have been slower with a 0.5% to 1% change in a year. However, it was successful in penetrating newer villages that accounted 10,000 u nits in such markets. Growing focus in the tractor division will also provide further care to M&M as slowdown in rural consumption has not been experienced yet. Besides, the strong replacement demand will be a key support in the near term as it accounts for 40% of sales.Indias tractor industry is well poised to register 10-12% growth in FY13 and with labor shortage driving the farm mechanization the industry is likely to register a 20% growth in the coming three years. With the industry providing sufficient headroom for growth, they expect sales from the farm equipment segment of M&M to grow 17-18% by the end of FY12.6.5 Macro factors- to drive the expected demand for farm equipment The quantum of tractors bought using cash payments has increased to 20-25% of sales in India, compared with 10% earlier, which reflects buoyancy in rural incomes. About 40% of the current tractor demand is from the replacement market. Though there is some concern about rural economy and consumption is s lowing down, M&M has not seen any slowdown in rural consumption. Shortage in farm labour has also acted as a key catalyst for tractor demand. Tractors are no longer a luxury for the rich farmers, but a tool for better cost management.6.6 New launches, foray into new segments to augment future growthIn FY11, M&M registered domestic volumes growth of 24% led by new product launches and strong performance from existing product ranges. It launchedGio, Xylo, Thar, Maximmo, Yuvraj, Genio and Arjun MAT, during the year which is likely to power the companys growth in future. Besides, M&M has also lined-up new launches, which would help bring additional volumes. It is ready to enter the market with a new SUV, 4-seater electric car, re-launch of Stallio motorcycle, two new versions of Verito, one SUV with SsangYong in India, aerospace components and mine protected vehicle (MPV-I).M&Ms recently launched XUV500 SUV received remarkable response from the domestic consumers. Priced at 10.8 lakhs, the company has rightly positioned XUV500 in the market for people who desires something above 7 lakhs and below 15-20 lakhs. As a result, M&Ms the XUV500 has gone a long way to set a booking record of 8,000 units in just 10 days of being launched in 5 cities of the country.6.7 SYMC to add value in premium UVsAcquisition of SYMC Motors (SYMC) gives the UV product line of the company an extension into the premium SUV segment. SYMC has a distribution network of over one hundred thirty dealers in Korea and 1,200 dealers in more than 90 countries. The acquisition gives M&M access to SYMCs prevalent product portfolio with an established foothold in the markets of South America, Russia, Eastern and Western Europe, and Africa which bodes well for M&Ms plans to launch a global SUV this year. The management has guided 50% volume growth at 113,000-114,000 units for SYMC in CY11, with the recent launch of Korando-C. Thus, the acquisition of Korean company SYMC augurs well for M&M in the long term, placing it on a new growth trajectory.As debt woes continue to plague one of its largest markets Europe SYMC is eyeing to enter emerging markets including India, China and Russia playing a bigger role in a bid to boost volumes in 2012 with a year-on-year volume growth of 40%. The company aims to sell 160,000 units by 2013 and 300,000 units by 2015-16.M&M-SYMC have finalised a combined future product portfolio strategy, which will see 3 new platforms and 4 new products coming in from both partners. The new sourcing strategy for M&M-SYMC is being put intoplace, which will see both companies sourcing an enormous $20 billion of components over the next 5 years. This huge sourcing is expected to bring in economies of scale and smother the cost for the duo.6.8 Strategic growth plan for Mahindra Navistar to drive M&M future growthMahindra Navistar Automotives Limited (MNAL), which is a 5149 joint venture between M&M and Navistar Inc., is planning to launch at least two new modelsa 49-tonne tractor trailer and a 25-tonne tipper for the mining sector in H2FY12E. Intending to establish a pan India presence, the company further intends to increase its current 48 enfranchisement across various cities to around 100 by adding 50 new dealers by the end of FY13E. With a targeted growth of 9% in the second half(a) of FY12E, the company is planning to see cash break-even in the next 12 months. Further, the company is planning to invest around 2.50 billion to add few more variants in the heavy-duty goods commercial vehicles segment, which in turn will help the company ramp up volumes and use its factory capacity fully in the next three years.6.9 M&M look to enter larger South Asian marketThe largest utility vehicle maker of the country is planning to set up an assembly plant in Southeast Asia in the next few years as a part of its strategy to expand its global presence through its entry to markets in Thailand and Indonesia. Currently, M&M exports vehicles to Malaysia and is aiming to expand to other markets in ASEAN region. Over the next four to five years, M&M sees at least 15-20% of its total export volumes coming from this region. In FY11, M&M exported 17,000 units of utility vehicles and pick-ups and around 11,000 tractors. The company is aiming to double overseas revenues to more than $1 billion by 2013 and is aiming two-fold increase in volumes to 100,000 units.6.10 M&M to launch its first compact Car in 2012M&M is eyeing to launch its first compact car after it acquired RevaElectric Car Company in 2001. The SUV-maker is aggressively working to launch its first compact car in the country Reva NXR by 2012. With a mileage of about 9.6 km for every 3 spent, the Reva NXR, ensures clubhouse times the mileage generated by the countrys most fuel-efficient petrol-powered car. At a time, when petrol prices are break of serve new highs M&M expects its Reva NXR to seek significant attention from the consumers who spend 7,000-8,000 every month on pe trol.Beside, M&M is also establishing one of worlds biggest manufacturing bases for electric cars of 30,000 units per annum near Bangalore, which is likely to father production in FY13. With increased demand for electric cars, M&M apart from its marketing strategy to sell its Reva NXR through an expanded network of 100 outlets in India, the company is also mulling over rolling its new electric car model in countries like Norway, which houses the highest consumer market for electric cars in the world. later M&M lead development in the electric car market of India, many other car makers are also developing supposition vehicles to cater to the emerging demand for Electric vehicles in India in the years to come. Polaris India, a major multi terrain vehicle manufacturing company is planning to introduce electric cars to Indian market. Considering the rising fuel prices, the impact on power and utilities companies of the electric vehicle market is likely to attain consumer attention in medium to long term.6. CONCLUSION AND RECOMMENDATIONSThe part of Indian automotive industry in Mahindra & Mahindra Ltd comprises of a number of Indian-origin and multinational players with vary degree of presence in different segments. Today, nine of the top ten global automotive manufacturers have a presence in India which clearly points to its grandness as a strategic market. Similarly, the domestic tractor market also has a mix of Indian-origin and international manufacturers and is divide by horsepower. While the automotive segment is doing well and has already clocked an average volume growth of 28% in April and May 2012, it may face problems in the form of policy decisions. The proposal to impose a higher excise duty on diesel cars/SUVs, which is yet to be implemented, is like a Damocles brand name hanging over the company.The differential in diesel pricing, which means charging less for transport trucks and more for diesel cars/SUVs, is another proposal that can make flav our difficult for Mahindra & Mahindra. Though the company cannot do anything about the monsoon, the management is taking several steps to vivify growth in the farm segment and retain a high growth rate in the automotive segment.With this in mind, Mahindra & Mahindra is set to launch six new products, which will cover both the segments, during 2012-13. Mahindra and Mahindra Ltd, the only manufacturer of electric cars in India, plans to introduce at least five such vehicles in the next three years to take advantage of a government plan to spend Rs. 14,000 crore to boost the popularity of electric and hybrid vehicles in the country. Therefore Mahindra is considered at the top in the automobile sector as of date. The growth strategy adopted by the company will have a colourful future for the company.