Mahindra targets Africa for business expansion

Entry into Africa

SP Shukla, president – group strategy, defence sector and chief brand officer, Mahindra Group
23075752_S P Shukla_01.jpg

The Mahindra Group, worth about R160.3 billion, one of India’s leading business houses, has its sights firmly set on the African continent as part of its ongoing expansion programme.

SP Shukla, president – group strategy, defence sector and chief brand officer, Mahindra Group, spoke of the company’s plans for Africa on the sidelines of the annual emerging markets conference board meeting in Port Elizabeth where he was a speaker.

“Mahindra has had a long and enduring relationship with the African continent and its people.

"With a population of a billion people and a combined annual GDP of about R19,8 trillion, it is a very strategic market for us.

"With 56 countries – some of which have the highest economic growth rates in the world – the continent presents immense opportunity for business,” he said.

He said that the establishment of a dedicated Africa desk by Mahindra in the last couple of years had provided added impetus to grow its businesses on the African continent.

In several instances, the Mahindra operation linked up with established businesses which made entry into new markets quicker and easier.

The company is already operating in 30 African countries and this number as well as the involvement of further Mahindra companies in the countries where it is already represented, is expected to grow rapidly in the future.

The automotive side of the business is represented in 25 of the 30 countries, while IT is operating in 20 of them and power generation through generators is already established in 12 countries.

He explained that although most South Africans know the Mahindra brand as a light commercial or SUV vehicle manufacturer, the company has 18 distinct areas of operation.

The diverse business interests of Mahindra now include aerospace, after-market, agri-business (fresh produce and farming inputs), automotive (vehicles), components, consulting, defence, energy, farming equipment, financial services, industrial equipment, Information technology, leisure and hospitality, logistics, real estate, retail, steel processing and two-wheelers.

“We are the only company in the world that can supply the full range of mobility requirements from scooters and motorcycles to light commercial vehicles, SUVs, trucks, buses, farming equipment (Mahindra is the world volume leader in tractor production), construction equipment, aircraft and now boats and yachts,” He said.

As an aside, he mentioned that the first Mahindra aircraft had been sold in South Africa recently.

The range currently consists of 5 and 8-seater aircraft as well as an agricultural crop-sprayer, while 10 and 18-seat models are under development.

Shukla explained that when Mahindra enters a country, it researches which of its various operating divisions would get most traction in the shortest time and this then becomes  the lead business in that so-called hub.

When this business is  well established, the company then looks for additional consumer or business-to-business opportunities for other Mahindra companies or divisions to enter that specific country.

Here the lead business for Mahindra is automotive, with its vehicles having been sold locally since 2004 with excellent progress being made in this area.

The visiting Mahindra senior executive said that last year the South African passenger car market had grown by 9%, whereas Mahindra’s sales volume in this segment was up by 66%.

“This year, we are looking to increase our sales by a further 50% on the figure for 2012 in a climate where the prediction is that the total South African vehicle market will grow by only 7%,” commented Shukla.

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