M&M eyes 50% revenue from abroad by Fy19, to have overeseas

As part of its strategy to net 50 per cent of automotive revenues from overseas by fiscal 2019, homegrown auto player Mahindra & Mahindra (M&M) is planning to set up a second base for itself outside the country.
The focus on setting up a base on a foreign shore emanates from the fact that M&M is aspiring to be a global player backed by Rs 4,200-crore investments it has done in several countries in farm machinery and auto sector since 2008 when it made the biggest buyout by snapping up over 60 per cent in Punjab Tractors followed by SsangYong.

"There is a need for us to have a second base outside the home market and we are working on it. But we can't give more details now," said a senior management member during an informal interaction with the media here today.
Rajesh Jejurikar, president & chief executive, farm equipment & two-wheelers division, said, M&M is already the no 1 tractor maker in the world in terms of volume and is present in 30 markets, including the US, Finland, Algeria, Nigeria, Kenya, South Africa, China, Japan and Australia.
Talking about the global aspiration, Jejurikar explained that in 2015, the geographical mix of M&M's farm machinery products stood at around 30 per cent which rose to 37 per cent in the current financial year. It is projected to jump to 50 per cent by fiscal 2019.

Group managing director Pawan Goenka said both M&M and its South Korean SsangYong are working together to design engines on a common platform.

"Both the companies will develop their own product around it which is expected to be launched by the middle of 2018," Goenka said, adding currently the company makes around 30 per cent of its revenue from overseas.
M&M had acquired 70 per cent stake in the then struggling SsangYong Motors in 2011 for around USD 450 million and since then has turned it around.
Synergy between the two is expected to save about USD 70 million over the next five years for the group, he added.

Goenka further said as part of its globalisation plan,
M&M is focusing on mergers and acquisitions in companies which can be beneficial in reaching their desired goals.
The other areas include increasing manufacturing footprint, research & development, enhancing branding and sales infrastructure are other important focus points, he added.
Goenka further said the new strategy is christened Shift@Mahindra which will involve the group driving all its businesses - from agri to farm equipments to automotive divisions working together.
When asked about capex into capacity addition, Goenka said the company has invested Rs 12,000 crore into its 14 plants and has built enough capacity till 2020.

Since 2003, M&M's revenue grew 16 times to Rs 63,300 crore in 2016 from Rs 3,900 crore, while its patents jumped from a mere one in 2003 to 173 during the same period.