Assignment of Business Policy & Strategic Management

1. INSTITUTE OF PROFESSIONAL EDUCATION AND
RESEARCH,BHOPAL
Factors influencing Mahindra and Mahindra Automotive Sector
Assignment of
Business Policy & Strategic Management
Submitted By-
Group 16
Rohit Dixit
Rustam Kumar Kushwaha
A Sagar Singh Thakur
A Sameeksha Bohare
A Sandeep Patel
A Sanjeev Vishwakarma
Shivakant Awasthi
Submitted To-
Prof. Rajneesh Ajmani

2. Internal and External Environment of Mahindra
Automotive
External Factors
Political factors-In 2002, the government of India formulated an auto policy that aimed at
promoting integrated, enduring and self-sustained growth of the Indian automotive industry. The
approval for foreign equity investment up to 100% in the automotive sector was allowed and
minimum investment criteria disallowed. The government promoted establishments of
international companies for manufacturing small, affordable passenger cars as well as tractor and
two wheelers. The government assisted the development of vehicle propelled by alternate energy
source. The government formulated plans to have a terminal life policy for Commercial Vehicles
along with incentives for replacement for such vehicles. It also promoted multi-model
transportation and the implementation of mass rapid transportation system.
These political influences have lead Mahindra and Mahindra to increase production of its
vehicles and inflow of foreign investments. Also the development of alternate energy source
vehicles has led Mahindra to acquire majority stake in REVA electric car co ltd.
Economical factors-The automobile companies are reorganizing their sales process due to
economic pressure on the industry. The government has granted concessions, by reducing the
interest rates for export financing. The growth of Indian economy at the rate of 8.5% per annum
has had a great influence on the automotive sector in India. Also the growth in the manufacturing
sector at the rate of 8-10 % per annum in the last few years has influenced the growth of this
sector. The globalization of India economy has led to the participation of several Indian firms
with global players. While some have formed joint ventures with equity participation, other also
has entered into technology tie-ups. These changes have allowed Mahindra to expand its market
and grow rapidly in India as well as abroad.
Social factors-The changed lifestyle of people has led to increased purchase of automobiles, so
automobile sector have a large customer base to serve. The increase in the income level of
consumer as increased the buying power of people. In India, today 85% of cars are financed in
India. Indian customers are highly educated and well informed. They are price sensitive as well
and put lot of importance on value for money .Preference for small and compact cars in the
Indian market has also increased. They are socially acceptable even amongst the well off. People
these days prefer fuel efficient cars with low running costs which Mahindra has ventured into
like Mahindra Renault, Scorpio, Xylo etc.
Technological factors-There are more emphasis laid on research and development in terms of
technology in this sector which has contributed to innovation. The government of India is also
promoting National Automotive testing and research and development infrastructure project.
Technological solution helps in integrating the supply chain, hence reduce losses and increase
profitability. With the development and evolution of alternate fuels, hybrid cars have made entry
into the market also global companies like Audi, BMW, Hyundai have setup their manufacturing
units in India. Mahindra and Mahindra is providing customized solutions and designer cars with
new technology.

3. Legal factors-The legal angle to the automotive sector has undergone a sea change during the
last 50 years and Mahindra and Mahindra has been able to cope up with the same. As more and
more stricter norms regarding environmental pollution has come into effect so Mahindra and
Mahindra has brought new technology into their products to address to the legal applications and
this constant endeavor of the Mahindra group has enabled it to constantly abide by the laws and
rules and regulations of India and the worlds over.
Ecological factors-The physical infrastructure of country such as bridges and roads affect the
use of automobiles. If there are smooth roads available then it will affect the use of automobiles.
The environment and weather conditions also affect the use of automobiles in the country. If the
environment is pleasant then the use of automobiles will be more. The entry of global companies
in the Indian environment has led to advancement in the products and the production process of
Mahindra and Mahindra.
Internal Factors
Organizational structure- Mr.Keshub Mahindra-Chairman Emeritus-Mahindra and Mahindra,
Anand G Mahindra-Chairman and Managing Director, The 21 Group Executive Board (GEB) of
all businesses units.
Production-Greenfield facility at Chakan, near Pune, Maharashtra. Chakan offers a flexible and
eco-friendly manufacturing layout for multiple Multi-Purpose Vehicles (MPVs), sport utility
vehicles (SUVs), and commercial vehicles. With a current capacity of 3.2 million vehicles per
year and a future-ready expandable module setup.
Currently manufacture Mahindra & Mahindra’s entire medium and heavy commercial vehicle
range including the 0.75 ton Maxximo, Single and Double Cab Pik-Ups and the whole new range
of Mahindra Trucks. The new global SUV, XUV 500 is also manufactured here.
Marketing-Marketing harmonization-They are now working on a set of initiatives that are
expected to yield benefits in terms of efficiencies, consumer insights, and cost savings. “This
new set of opportunities offers a great scope for synergies and teamwork and focus on
tremendous opportunity to grow by tapping the rural consumer.
Finance-The Automotive and Farm Divisions of Company have shown good performance
during the year, reflecting substantial growth in the net income of the Company by 26.8% from
Rs. 32,319 crores in the previous year to Rs. 40,990 crores in the year under review.
Profit after tax clocked an increase of 16.5% at Rs. 3,353 crores as against Rs.2,879 crores in the
previous year.
Human Resource-Staff of over 2,000 is highly trained in the fields of mechanical, electronic,
civil and electric engineering as well as paint technology. partner with two regional tribal
Industrial Training Institutes (ITIs) to facilitate a match between educational quality and content
and industry demands.
R&D-The company is investing about Rs 150 crore to develop electric versions of its three
existing vehicles -- Gio, Maxximo and Verito.

4. Please provide your valuable suggestions for future
Improvement of the Assignment.