Interest rates, commodity prices may upset automobile growth, says Anand Mahindra

Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra group, who describes 2010-11 as a “stellar year” for Mahindra & Mahindra's passenger vehicles business, is worried that “the looming spectre of (rising) interest rates and commodity prices” may dampen the otherwise bright prospects in the current year.

In 2010-11, the company sold 358,021 vehicles in the domestic market, up 25 per cent over the previous year.

Ssangyong stable

Mr Mahindra was here in connection with the opening of a showroom of Mahindra FirstChoice, a company that sells used cars. In an informal chat with journalists, he said that cars from the Ssangyong stable would be introduced in India within the next 18 months.

(Ssangyong is a Korean car company in which the Mahindra bought a 70 per cent controlling stake last March for $463 million. However, the process of acquisition was only recently completed. Earlier reports have said that Mahindra intends to bring the Korando and Rexton sports utility vehicles to India.)

Asked if M&M would manufacture Ssangyong cars in India, Mr Mahindra said, “certainly”. He said that “a variety of sites” were under consideration for locating the project.

Ssangyong had a good year in 2010, when it profitably sold 81,000 cars. Answering a question, Mr Mahindra said that the problem that Ssangyong faced previously mainly arose out of frequent changes in ownership – it was started as a joint venture with Daimler, passed into the hands of the now extinct Daewoo group, then to the Chinese automotive major, SAIC and then went into receivership until Mahindra took it over.

He said that the singular challenge that Mahindra faced in Korea was to “restore the brand value and the customers' faith in the product.”

Obama upbeat about Reva

Mr Mahindra was among a few select industrialists who met the US President, Mr Barak Obama, when the latter had come to India in November 2010. When the chat went into what transpired in that meeting, Mr Mahindra said that he briefed the President about the Reva electric car (which the Mahindra group took over in May 2010). The cars are sold in the US too. Mr Mahindra said that the President was very upbeat about the green vehicle and even referred to it in a subsequent speech.

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