Mahindra set for SA expansion

14 March 2007

After just over two years of doing business in South Africa, Indian vehicle manufacturer Mahindra & Mahindra has set its sights on expanding its dealership network, available models and sectors it competes in.

According to Business Report, Mahindra, a US$4-billion company, has identified Africa as a key future market, and sees South Africa as an entry point into sub-Saharan Africa.

The company is already selling more than 4 000 vehicles a year in SA, its range including the Scorpio sports utility vehicle and Bolero pickup truck. Now it is eying the country’s commercial vehicle market and agricultural sector, stating that it will sell tractors, trucks and tractor-trailers from May onwards.

Speaking to Business Report last month, Mahindra South Africa’s chief executive officer Vijay Nakra said the company would launch a range of 30- to 80-horsepower tractors at the 2007 Nampo Agricultural Trade Show in Bothaville, the largest of its kind on the continent.

Nakra said the company would be targeting farmers looking for smaller, more competitively priced tractors.

“We believe the proposition we are talking about will take about 12 to 18 months to at least gain visibility. But I’m not able to talk about volumes and market share. We believe we’ll be able to gain a significant presence,” he said.

Mahindra will also have a commercial vehicle range, with models ranging from a 3.5-ton medium commercial truck to tractor-trailers and even a 15- to 30-seater minibus.

“Our approach is not to bring in a product specifically for the taxi market,” Nakra told Business Report. “We’re bringing in a people mover, and one of the segments in that market is the taxi market.”

A Mahindra team from India will also come to South Africa in the near future to meet with domestic component manufacturers, as the company conducts a feasibility study into sourcing spares locally. The study is expected to take at least four months.

“What we are looking at from at parent company level is to source globally competitive automotive parts from South Africa,” Nakra said. “It is not based primarily on earning motor industry development programme export credits.”

According to Business Report, Mahindra SA would consider setting up South African operations once their sales reached between 600 and 700 units a month. It sold 340 vehicles in January.

Mahindra are also looking into opportunities in various sectors in South Africa, through their subsidiaries. These include Club Mahindra, a time-share company, Tech Mahindra, which supplies telecommunications software solutions, and Mahindra Finance.

“We’re looking forward to the future and the plans we have for this market,” Nakra said. reporter

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