Mahindra & Mahindra

- Ankush Jain 11A

Mahindra & Mahindra was founded in 1945 as steel trading company and forayed into automotive in
1947. It is a part of Mahindra Group, an Indian conglomerate. Mahindra & Mahindra, branded on its
products usually as 'Mahindra', produces SUVs, saloon cars, pickups, commercial vehicles, and two
wheeled motorcycles and tractors. It is headquartered in Mumbai and has global presence in all
continents. M&M will make its maiden entry into the heavy trucks segment with Mahindra Navistar, the
joint venture with International Truck, USA. Mahindra acquired 70% stake in S. Koreas Ssangyong.
PESTLE Analysis
Political
The policies of the government and the ruling party affect the automotive industry and the various
regulations on FDI also affect investment in the sector. The governments investments on infrastructure
like roads affect the automobile sales.
M&M is operating in Egypt. Egypt is undergoing a great political turmoil. It has been around two years
since independence but the political climate hasnt got better yet. Instability in government cannot
provide the management and growth scenario that a country needs. This leads to lower economic
output. A poor economy impacts consumption. Also, social instability can create problems in operations
running in those countries.
Economic
Recent slump in the economic conditions have led to fall in car sales. Currency fluctuations and rising
fuel costs lead to drop in automobile sales. With the overall GDP growth in the international market
going down, sales in the sector are bound to fall. At the same time, economic slump in the
manufacturing industry which supplies raw material to the company leads to a fall in sales. In June,
M&M saw a 13% drop in sales.
Social
Cultural issues are present in all aspects of international activities, including selling to foreign customers,
buying materials overseas, working with vendors, and setting up operations. Mahindra operates in six
varied cultural markets and has faced this issue when going global.

Technological

Innovation plays a big role in moving ahead in the sector. M&M has constantly upgraded its
technological knowledge through JVs with several foreign partners like Renault, Ford, Ssangyong etc.
Mahindra launched Rewa in the Indian market which was a fully electric powered vehicle. However, the
technology used was not so robust as the car was not energy efficient and would travel only 60 kms on a
full charge of 8hours; thus consuming considerable amount of energy.

Legal

Global Vehicles alleged that Mahindra failed to fulfill its contract obligations in USA. Mahindra entered
into an agreement with Global Vehicles because the company was interested in launching a small truck,
the Scorpio, in the US market. Mahindra spent nearly $100 million in its efforts to bring the Scorpio
vehicle to the US market. The process of entering the US is very complex, costly and time consuming.

Environmental

Customers have now become more environment conscious and would consider buying a brand which is
sustainable and is focusing on eco-friendly processes. M&M introduced Rewa; an electric powered car
which was pollution free and would have helped in bringing down CO
2
emissions. It has been now
mandated on automobile industries to manufacture products and source raw materials which can be
easily disposed and recycled. International markets have stringent environmental and CO
2
emission
demands which could hamper further growth of the company in that market.