M & M two-wheeler arm get ready for a fresh start

Preparing for the long haul, India’s largest utility vehicle major, Mahindra and Mahindra (M&M) is taking a fresh guard by rejigging its entire two-wheeler business — from the shop floor to R&D, from distribution to launching a slew of new products — in a bid to capture a slice of one of the world’s fastest growing two-wheeler markets. Anoop Mathur, president, twowheeler division, M&M told ET: “We have been in the two-wheeler industry and will continue to invest in it. 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-a-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 setup and its product portfolio for the future. M&M is infusing over 500 crore of fresh funds into the twowheeler business, which will go into setting up of a strong domestic R&D centre led by PS Ashok, the key man behind the LML twowheeler business. It has already set up all new assembly lines for scooters and motorcycles at its Pithampur plant with a capacity of 1 million units. Under PS Ashok the company has already set up a strong team of 160 engineers, which it claims is the third largest R&D setup in the country in the domestic twowheeler industry. Viren Popli, senior VP, strategy & market development, two-wheelers, M&M, 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 the several moves the company is planning. The company plans to relaunch Stallio in the next few months and has 3 more products including another motorcycle and scooter in the offing in FY13, which will help it build its falling volumes. Mojo, the premium motorcycle too should be launched in 12-18 months time. The company inherited a dated R&D setup from the Kinetic acquisition and over the years it put together an Ecosystem of international R&D companies, which it 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 has now been 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 Kinetic Motors in 2008 for an acquisition price of approximately 100 crore, but since then it has infused over 500-800 crore in the business, yet it is incurring losses. Mahindra Two Wheelers posted a loss of 169.21 crore in 2010-11 and it has been piling. In FY12, 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%.