Market share a fictional goal, we will focus on products: Anand Mahindra

Anand G Mahindra, chairman, Mahindra and Mahindra, tells Shally Seth Mohile that market share is a fictional goal as long as the company is able to deliver healthy returns to the shareholders and come out with models that people aspire to. 

On the sidelines of the launch of the Marazzo, a seven-seat model, at the company’s facility in Nashik, Mahindra touched upon the changing market dynamics in the utility vehicle segment. He pointed out that the new model had been co-developed across three continents, and signalled the company’s arrival as a global player. Edited excerpts:

Despite new launches, Mahindra’s market share in sports utility vehicles (SUVs) has been coming down consistently. From more than 40 per cent five years back, it is now down to 23 per cent. Are you worried?

I’m not worried at all. If you look at our financial returns, they have been the highest in a long time. So what we will focus on are products, as the definition of the market segment is changing. 

If you look at SUVs as the classical definition of ladder-frame vehicles, our market share is the same as it was earlier. Every car company is now entering the segment by simply changing a few things and calling its model an SUV. We can’t lament that. As the pie expands, your share in that pie goes down. We are going to focus on how to make products that people clamour to buy. As long as they clamour to buy our products, we improve our financials. Market share in my opinion is a fictional goal.

M&M Executive Chairperson Anand Mahindra with Managing Director Pawan Goenka at the launch of Mahindra Marazzo multi-purpose vehicle, in Nashik on Monday. The car’s prices starts from Rs 999,000 | Photo: PTI

In your opening remarks you said the Marazzo signalled Mahindra’s arrival as a global automaker. Can you elaborate on that?

To me, the real milestone we have reached is global collaboration — it’s not about technology. Sometimes, you can source technology that has come from only one location. 

The real challenge is: How can you make different cultures collaborate? We have a culture based out of Detroit, one out of Italy, and one from Mahindra Research Valley in Chennai. One should never underestimate the human challenge involved in getting people to talk to each other, and create together. 

The global co-creation process by different centres is what is underlying this car. Once you create a template for that, you can replicate it in other geographies. 

How does it translate into better volumes and what is in it for target customers?

Target customers like to hear stories about Indian brands going global. It helps in building the brand and creates excitement and quality. It helps create one’s belief in quality. Having said that, the car has to speak for itself. Branding and storytelling can only take you that far. Global collaboration has to reflect in product. 

Over the past four years, we have seen several Indian automakers including, M&M and Ford, forge tie-ups. But, the contours have changed from what they were earlier. Companies are no longer looking at just equity or technical collaborations. Your thoughts on this...

Yes, it has definitely changed over the years. The relationship is going to be that much more dynamic. When we first tied up with Ford, we had never made an SUV. The Scorpio was our first attempt. Over the years, the level of mutual respect has gone up. I think multinational companies have learnt their lessons in humility, given their ups and downs. They have been through troubled times. They have learnt to respect other sources of technologies.

Mahindra has managed to turn around the commercial vehicle business but two-wheelers are yet to see the light of day. What’s the road ahead?

I have been teasing the public about Java. The launch is going to happen soon. I agree, we have to do a lot in the two-wheeler business, but you will be heartened by what we will show you soon.