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With SsangYong Motor Company in its kitty, Mahindra & Mahindra is now getting ready to put the building blocks in place.
“There is no question that it is a good opportunity for M&M in its effort to be a global company but there is a lot of work that needs to be done at SsangYong,” Dr Pawan Goenka, President, Automotive & Farm Equipment Sectors, told Business Line .
As Chairman of SsangYong, he would end up travelling more frequently to Korea where a new board of directors is in place.
“I will be focusing on issues relating to strategy, long-term financial viability and major HR initiatives,” Dr Goenka said.
SsangYong clocked sales of 81,000 units in 2010 which translated into business of nearly $1.8 billion.
The target for this year is nearly 50 per cent more at 120,000 units which will, in that case, result in a topline of nearly $2.7 billion.
This would be the best piece of news for M&M as it sets about with its new blueprint for the Korean automaker.
Top priority
Another top priority for M&M is to attract more talent into SsangYong as part of the endeavour to “create a whole lot of excitement”. In fact, some key people had quit the company when it was going through a rough patch prior to the acquisition. Dr Goenka had said in a previous interview that it was his understanding that the skills needed for the future were not in short supply in the market. Hence, getting people back to SsangYong could be done with the right focus and direction.
In addition, M&M plans to focus on strengthening the product pipeline which had languished for some years simply because there was not enough investment coming in. Rebuilding the SsangYong brand is also part of the turnaround plan. “Our research says there is no basic damage to the brand and that it has become weak due to a host of factors. It is not difficult for us to bring it back on track,” Dr Goenka had said.
Synergies
Both M&M and SsangYong will also work on optimising synergies in key areas including the global network, bringing products to India, development of vehicles jointly on a common platform, joint sourcing and so on. If everything goes according to plan, the Korean automaker's Korando and Rexton will be assembled at M&M's Chakan plant near Pune towards the end of 2011-12.
“These vehicles will be part of the premium SUV space,” Dr Goenka said. In contrast, M&M's own range, including the new SUV codenamed W201 as well as the Scorpio and Bolero, will be in the mass volume space priced around Rs 12 lakh. It also remains to be seen if the SsangYong badge will be used in India since the branding initiatives will vary from one region to another.
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