Anand Mahindra, Chairman & Managing Director, Mahindra Group: In conversation with Raghav Sarma

Anand Mahindra is the Chairman & Managing Director of the US$ 15.4 billion diversified Mahindra Group (www.mahindra.com); which has a strong and growing presence in the global automotive sector. As one of the most respected global business leaders, he has been an inspiration to many with his visionary approach and strong entrepreneurial drive that has taken the group from humble beginnings to become one of India’s largest multinational enterprise with a global presence. In this exclusive Q&A session on the Licence to Drive platform, he shares his insights on growth, innovation, new thinking and what drives him in a tough and challenging business environment.

August 2012/ In conversation with Raghav Sarma:

Raghav: Congratulations to you Sir, on being appointed the Chairman of the Mahindra Group and thank you for joining me on the Licence to Drive platform. It is an absolute honour for me to welcome you, and I am sure your thoughts and insights shared here will be an inspiration for many of our young readers and auto enthusiasts around the world.

Anand Mahindra: Raghav, I was absolutely delighted to see your blog which is proof of the fact that the spirit of auto passion is alive and well amongst our youth! It’s great to see someone so young channel his passion into such a creative endeavour which I am sure will inspire others as well.

Raghav: Thank you very much Sir. Let me start with a question from a slightly broader perspective. Mahindra is the only company in the world to have a presence across all mean of transportation – be it air, land or water. What’s the next frontier?

Anand Mahindra: At Mahindra, we like to say that we are present across the transport eco-system, from two wheelers to trucks and now even aerospace. It’s part of our vision to offer consumers value for money products to fulfill their transportation needs. Our aim is to foray into businesses which add value to our strategic vision and goals. This is a constant process and we will share our plans as and when relevant.

Raghav: M&M’s passenger vehicle segment has had a remarkable run over the last decade. You are now the 3rd largest player in the Indian passenger vehicle market, but without a presence in the volume generating entry level hatchback segment. How do you explain this rather unusual position that defies conventional wisdom?

Anand Mahindra: The fact that we are the third largest player in the passenger vehicle segment in India is testimony to the strength of our products and the faith that customers have reposed in the brand. Mahindra first forayed into the automotive business by assembling the Willys Jeep in India and hence, you could say that utility vehicles are in our blood and part of our DNA. Today, we are known as a manufacturer of tough and rugged UVs which provide the consumer with great performance, style and value for money in a single package. This is what we are known for, not only in India but across the world as well. So UV’s will always remain the core area where we want to be represented across a spectrum or segments.

Raghav: When the Indian market opened up in the 90’s, did you envisage that Indian auto companies like M&M and Tata really stood a chance to compete against the big auto giants of the world who came in? What were the key challenges and how did you succeed in overcoming them? 

Anand Mahindra: In every threat there is an inherent opportunity. It all depends on how you look at the situation. Liberalization and the entry of foreign auto giants encouraged us to build further on our strengths and create better products for the Indian consumer. Our understanding of the Indian customer, gathered over decades, was definitely a significant competitive advantage. It was certainly a challenging time for us but we learnt a great deal from it and I’m proud to say we have succeeded.

Raghav: Mahindra’s acquisition of SsangYong Motors has opened new markets and access to a new set of products and design capabilities. How soon are we likely to see some of the new models in India?

Anand Mahindra: The acquisition of SsangYong Motors presents us with several possibilities as far as products are concerned. The company has an excellent product portfolio and an established presence in several markets around the world and we look forward to bringing the brand to India.

Raghav: The mini SUV segment is heating up in India and early trends show that it may eat into the hatch, sedan, and SUV market shares. We have also heard of M&M’s own Mini Xylo and XUV1 concept. Since there is a lot at stake here, could you share your segment strategy?

Anand Mahindra: At the moment, I cannot share details on this.

Raghav: Renault has made a strong come back into the Indian market after parting ways with Mahindra. How do you perceive the challenge especially from the Duster? Looking back, would you have done anything differently to make the partnership work?

Anand Mahindra: The Renault partnership was an important part of our development and learning as a leading automotive company. We learnt a great deal from that experience which has helped equip us to face the competition. The XUV500 is a great product and has enjoyed an unprecedented level of popularity amongst consumers. It is more than capable of taking on the competition in its segment.

Raghav: The M&M acquisition of Reva and the unveiling of the Electric Concept Car Reva NXR had generated a lot of interest. While the world deserves affordable & practical alternate energy vehicles, we lack an eco system to support them. How far into the future do you think, before ‘affordable & practical’ becomes a reality? Or will it always continue to be a niche segment?

Anand Mahindra: Across the world, there is already a perceptible shift away from fossil fuels, towards alternative sources of energy. And it’s not only environmentally conscious consumers but governments as well which are becoming increasingly aware of the benefits of eco-friendly vehicles. Hence, while this may still be a niche segment at present, in future there is scope for it to move towards ‘affordable and practical’.

Raghav: You have always championed innovation and new thinking. Could you share how Mahindra is leading the way on this front, in the auto industry?

Anand Mahindra: Innovation is part of our DNA and defines everything we do, in terms of both manufacturing processes and products. Perhaps one of the best examples I can give you here is Mahindra Research Valley, our world class engineering and research and development center in Chennai which was recently inaugurated by His Excellency, Dr. APJ Abdul Kalam, Honourable Former President of India.

MRV bears testimony to the Mahindra Group’s commitment to technology-driven innovation, as it is a facility that will house the company’s engineering research and product development wings for automobiles and tractors, all under one roof. It is perhaps the only R&D facility of its kind in the world for automobiles and tractors alike.

MRV will encourage a collaborative approach, permitting direct knowledge transfer between various teams. Its state-of-the-art research, design and development facilities will thus, allow engineers and designers the freedom to proactively pursue activities in areas like environment friendly advanced propulsion systems – hydrogen, fuel cells, bio-diesels and hybrids. Embedded systems, infotronics, artificial intelligence, mechatronics and advanced telematics will be other areas that engineers at MRV will be able to pursue. The facility will also afford the Mahindra Group research capabilities in alternative polymer technology for automotive applications, vehicle passenger safety and validation of aggregates and vehicles. MRV’s state-of-the-art communication networks will also enable automotive global networking.

Raghav: Mahindra acquired GRD Italy, the automotive research & design company which continues to operate out of Europe. Considering the talent pool and cost advantages India has, do you see a potential for boutique automotive design firms here, or for that matter India emerging as a global automotive design hub in the near future?

Anand Mahindra: India has plenty of quality talent in this field and given our cost advantages I am very optimistic about the future of the automotive design industry here. Moreover, as more and more R&D centers such as MRV are established in India, it will definitely provide an impetus to the design function.

Raghav: Your personal interests in architecture, arts, sports, education, media, entertainment, and philanthropy have sparked various initiatives within the group. How much of your personality is reflected in the vehicles you make? 

Anand Mahindra: Perhaps the most important aspect of the product development process is taking the needs of the customer into account. The final product must reflect his needs and wants. For instance, the XUV500 was created post extensive inputs and customer testing. Hence, the manufacturing process at Mahindra is not personality driven but customer driven.

Raghav: You are one of the most admired business leaders in the country today, and undoubtedly the most inspirational for the next generation. What would be your message for the youth who aspire to be successful and make a mark in the automobile industry? 

Anand Mahindra: My advice to today’s youth would be simply to follow their passion, whether it is in the automobile industry or any other discipline. Passion for what you do will enable you to overcome barriers and truly make a difference in the world.

Raghav: You always drive your own vehicles. But what drives you? 

Anand Mahindra: The vision and core values of the Mahindra Group inspire me to give my best every day and help others ‘Rise’.

Raghav: Thank you very much Sir. It was an absolute privilege to have conducted this Q&A session with you. I would look forward to more occasions where we can build a connect with the youth and the Mahindra Group in the future through this platform, so that you continue to ‘Spark the Rise’ amongst all of us.