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Saturday, July 13, 2024

Anand Mahindra: The Lesser Known Journey Behind An Automobile Giant


Anand Mahindra, who was born in Mumbai in 1955, belonged to the third generation of an industrialist family. His parents were Harish and Indira Mahindra, and his grandfather was Jagdish Mahindra, one of the founders of the Mahindra and Mahindra (M&M) business empire. 

Anand attended Lawrence School in Lovedale for his schooling and later pursued filmmaking and architecture, but ultimately decided to pursue a different path. In 1981, he obtained his MBA from Harvard Business School and began his career as an Executive Assistant (Finance) at Mahindra Ugine Steel Company Ltd (MUSCO). After eight years, he was promoted to the position of President and Deputy Managing Director. Under his leadership, the company diversified into uncharted areas, such as real estate development and hospitality management.

The Roadblocks

Anand Mahindra encountered a major obstacle when he was appointed to oversee M&M’s Kandivali Factory in 1991. The worker’s union was on strike and surrounded his office, making the situation uncontrollable. One might assume that Anand Mahindra met their demands, given that employees are a company’s most valuable asset. However, he took a clever approach instead. He announced that the workers would not receive a Diwali bonus if they didn’t return to work. Surprisingly, this move helped reduce the strikes, and the company’s productivity gains increased from 50% to 150%.

The Mahindra Group encountered another significant challenge after this. They lacked the technology to manufacture a car from scratch, so they formed a partnership with Ford. Regrettably, the Escort car flopped when it hit the market. Despite this setback, Anand Mahindra remained optimistic. He embarked on a seemingly impossible mission to produce a vehicle without a joint venture. Most rational people would have avoided such a venture since their previous product failed, even after working with a multinational automaker like Ford. However, Anand Mahindra defied all odds.

What happened next may surprise you. The result was the creation of Scorpio, the SUV, which took the markets by storm. Moreover, the project’s production cost was only Rs 550 Crore, which was one-tenth the cost of other automakers. The SUV’s popularity extended beyond India, with demand in European and African countries. You may not believe that the SUV had a 36% market share, whereas Tata Group only managed 5%. This success marked the beginning of modern utility vehicles like XUV and KUV.

Growth and acquisitions

In 2009, Mahindra and Mahindra had become a renowned billion-dollar business among Indian households, demonstrating that Indians are capable of achieving greatness. However, the company believed that a rebranding was necessary. As a result, they added the slogan “Rise” as a suffix to their name, which gave rise to ‘Mahindra Rise.’

M&M has an extensive history of acquisitions, with their first one being the purchase of a 100% stake in Gujarat Tractors Ltd, which was previously fully owned by the Government of Gujarat, and was finalized in 1999. Following this, M&M acquired Punjab Tractor Ltd eight years later, cementing its position as the world’s largest tractor manufacturer.

In the past decade, M&M experienced a golden period with numerous acquisitions, including the REVA Electric Car Company in 2010, SsangYong Motor Company in 2011, and a one-third stake in Mitsubishi Agricultural Machinery in 2015, which allowed them to expand their global investments. Expansion is a crucial business objective for the company, and they continued to pursue it even after 2015, with many more acquisitions in the following years. It seems as though M&M aims to invest in every aspect of the automobile industry worldwide.

Thanks to the extraordinary efforts of Anand Mahindra, M&M has established itself as the market leader in the tractor and light commercial vehicle sector. Furthermore, the company has achieved a dominant position in the IT, financial services, and vacation ownership industries. M&M has a vast international presence, operating in 72 countries and conducting business in over 100 countries.

In April 2020, Anand Mahindra stepped down from his position as the Executive Chairman of M&M and became a non-executive Chairman. Nevertheless, his legacy remains, as his contributions led to the current state of the company, which continues to thrive.

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