THE UNUSUAL SUSPECTS

After Markets Sector

Campus Champions
XLRI, Jamshedpur
Final Round Presentation to GMB
Members
24th November 2009, Mumbai

Problems in Hand
Strategic Alliances with local players
Effective Procurement policy
Profitable & Sustainable business
venture
Marketing Campaign for creating
impact
Future of First Choice

Team Unusual Suspects, XLRI

Current Partner Selection

Franchisee Store
Infrastructure
500 - 1000 sq' ft
Parking space: 15-20 cars
Working Capital
INR 20 lacs - 50 lacs

Franchisee Superstore
Infrastructure
25000 - 40000 sq' ft
Working Capital
INR 1 crore - 3 crore
Team Unusual Suspects, XLRI

Issues Raised
Partners
Deciding criteria- Money and space?
Selection: pull
push?
Services
Customer attracted on basis of Mahindra store?
Extension to:
Sale of bikes?
After sales services to vehicle purchasers?
Customers
Correct understanding of customer ?
Same irrespective of the town he lives in?
Customer satisfied with just the second hand cars?
Team Unusual Suspects, XLRI

Customer Understanding
31 Respondents- Tier I & II cities
Preference for After-Sales service

Preference to buy 2nd Hand Car

Tier - I

Branded Showroom; 67%

From the purchase place; 62%

other service station; 38%

Known Service Station; 33%

Preference to buy 2nd Hand Car

Tier - II

Preference for After-Sales service

Known Service Station; 90%

From the purchase place; 70%

other service station; 30%

Branded Showroom; 10%

Customer do not associate Mahindra brand with Pre-Owned Vehicles

Customers looking for 1 - stop solution to ALL problems
PURCHASE

AFTER SALES SERVICE

DISPOSAL

Team Unusual Suspects, XLRI

Customer Centric Solution

One stop solution of all problems (Cars /
Bikes):
Purchase
After Sales service
Disposal
Dual power:
Established brand name
Trust established from a garage
Team Unusual Suspects, XLRI

Solutions for Mahindra

Pull
Push
Solves the problem of:
Building Strategic Alliances with key local
players
Effective Procurement strategy
Synergies
Mahindra First Choice Services Ltd
Mahindra Finance
Mahindra Spares
Mahindra Insurance Brokers Ltd
Team Unusual Suspects, XLRI

Innovation
BOT (Build- Operate- Transfer)

Team Unusual Suspects, XLRI

How to select the garage?

Time in city > 5 years
Daily visit of cars > 30
Located in a high population density area
Mechanics employed > 20
Sample Garage: HAPPY DA GARAGE
Happy Singh is in the car/ bike garage business for the last 20
years in Chandigarh. His garage is located in prime auto
market and is one of the most reputed and trusted shop of the
city. He employs 25 mechanics who have learnt the art by not
undergoing any training but by practicing on the vehicles.
Team Unusual Suspects, XLRI

Pilot locations
Where Mahindra First Choice not operating currently
Chandigarh

Jalandhar

Faridabad

Kanpur

Madurai

Surat

Hyderabad

Indore

Bhubaneswar

Locational Advantages:
Large concentration of cars in India
High per capita income
Transition of becoming next metros
High regard for quality trusted brands
Regard for long term relationships
Team Unusual Suspects, XLRI

Mind the Ps
People

Physical Facilities

Mechanics trained by Company

Certified training centres
Fixed + Point based Variable
Pay
Trained support staff
Attracting & retaining the best
mechanics:
Attractive salary
Incentives
Continue the existing:
Sales training to employees
Procurement Training

AC waiting room- cumlounge

Cable TV and newspapers
2 separate work floors
Different dresses
Water coolers/restrooms
Separate cash and
vehicle delivery counters
Single window clearance

Team Unusual Suspects, XLRI

Win-Win Proposition
Mahindra

Garage Owner

Constant revenue model

Association with the biggest

name

No high input costs

Top of mind brand visibility
Effective procurement
strategy

Exclusivity
Constant share of revenue
Trained workforce
Complete makeover of garage

Top garage of city targeted New customers

Goodwill & Customers
Loan for machinery upgradation
Quality Checks for vehicles
attached
Possible Exit strategy

Possibility of an Exit

Team Unusual Suspects, XLRI

Team Unusual Suspects, XLRI

Hamari Pehli Pasand

Communication Goal:
Awareness & Relevance among target audience
Consistent, clear & compelling brand messages
Challenge:
Involve people- Talk not only listen
Tap into media relevant to target audience
Solution:
No use of celebrity endorser
Indian family- Brand ambassador stating proudly
Hamari Pehli Pasand
Increasing ownership and familiarity
Team Unusual Suspects, XLRI

Key Highlights
What stands out?
Target audience -> brand ambassador
Celebrity Appeal
Every family -> Celebrity
Feature on the brands promotional material
Engaging Customers
Engaging families pan-India
Getting them to talk about their experiences
People write their experiences where
Mahindra helped them become a true star
Talkability?
Use of Television, Newspapers, Magazines,
Radio, Outdoor, Internet, Mobiles, PR
Media blitz across relevant media platforms
Team Unusual Suspects, XLRI

Price of Servicing Cars

Type of Service

Servicing
Time

Basic Cost (Including

Labour)

1st Service

1 hour

Rs 0

10,000km/6 month
Service

1 hour

Rs 800

20,000km/1yr Service

1.5 hours

Rs 800

30,000km/1.5yr Service

1 hour

Rs 1000

40,000km/2yr Service

2 hours

Rs 1000

50,000km/2.5yr Service

1.5 hours

Rs 1200

60,000km/3yr Service

2 hours

Rs 1200

70,000km/3.5yr Service

1 .5 hours

Rs 1400

80,000km/4yr Service

2 hours

Rs 1400

90,000km/4.5yr
1.5 hours
Rs 1600
NOTE:
Cost does NOT
include the2cost
of Spare parts orRs
Recommended
100,000km/5yr
Service
hours
1600
Services taken

Team Unusual Suspects, XLRI

Recommended Services
(Cars)
NAME

SERVICES OFFERED

COST
(Rs)

HIT

Basic Engine checkup, brake,

clutch, suspension checkup,
lubrication

999

SUPERHIT

HIT + Thorough checkup of

engine, tyres, brakes, wheel
alignment, fuel efficiency

1999

BLOCKBUSTER

SUPERHIT+ painting, denting,

wiper, throttle system , collision
repair

2999

Note: Similar Services offered for Bikes

Team Unusual Suspects, XLRI

Sound Financials
Particulars

Revenue

1,99,79,520

2,44,84,437

3,00,37,738

3,68,93,461

34,65,000

38,11,500

41,92,650

46,11,915

6,54,70,363

7,24,43,309

8,02,02,990

8,88,46,863

18,00,000

19,80,000

21,78,000

23,95,800

26,35,380

8,04,68,520

9,08,94,883

28,80,000

30,24,000

31,82,400

33,56,640

35,48,304

9,60,000

10,56,000

11,61,600

12,77,760

14,05,536

36,00,000

39,60,000

43,56,000

47,91,600

52,70,760

4,80,000

5,28,000

5,80,800

6,38,880

7,02,768

79,20,000

85,68,000

92,80,800

1,00,64,880

1,09,27,368

7,25,48,520

8,23,26,883

9,36,36,446

2,46,66,497

2,79,91,140

3,18,36,392

3,62,99,861

4,15,00,485

4,78,82,023

5,43,35,743

6,18,00,054

7,04,64,437

8,05,59,766

Revenue From Servicing Of

Cars
1,63,20,000
Revenue From Servicing Of
Bikes
31,50,000
Revenue From Sale Of Second
Hand Cars
5,91,98,520
Revenue From Sale of Bikes
Total Revenue

Cost
Wages
Salary
Lubricants
Other Misc Expenses
Total Cost
PBT
Less Tax
PAT

10,29,17,246 11,68,29,178 13,29,87,619

10,67,64,298 12,20,60,251

Team Unusual Suspects, XLRI

Per Store Cash Flow

Cash Flow for Company

Cash Flow Per Store

40,000,000
35,000,000

3,000,000,000

30,000,000

2,500,000,000

25,000,000

2,000,000,000

20,000,000
15,000,000

1,500,000,000

10,000,000

1,000,000,000

5,000,000

500,000,000

Team Unusual Suspects, XLRI

Sensitivity Analysis
99,000,000
98,000,000
97,000,000
96,000,000
95,000,000
94,000,000
93,000,000
92,000,000
91,000,000
90,000,000

% Growth in
Cost
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%

Team Unusual Suspects, XLRI

NPV
9,80,01,441
9,75,54,622
9,70,91,135
9,66,10,506
9,61,12,251
9,55,95,884
9,50,60,906
9,45,06,816
9,39,33,103
9,33,39,250
9,27,24,730

Sensitivity Analysis
140,000,000

Growth Sales

% Growth in Sales
Of Cars

NPV

-5%

6,51,54,976

-2%

7,00,82,591

0%

7,36,34,510

2%

7,74,20,564

5%

8,35,82,257

8%

9,03,90,500

10%

9,53,30,753

12%

10,06,25,478

120,000,000
100,000,000
80,000,000
60,000,000
40,000,000

NPV

20,000,000
-

Team Unusual Suspects, 14%

XLRI

10,63,06,529

Competitor Analysis
Big Players: Maruti,
Honda, Hyundai, Ford &
Chevrolet

Authorized
Service Stations

Unorganised PreOwned Cars Market

But
Cost effective
1 stop services: 2 & 4 wheelers
Customized servicing options
Prominent location factor
Promotional
&
Advertisement
initiatives
Mahindra brand name
Possible exit for Mahindra

Team Unusual Suspects, XLRI

Brand Mahindra
Extensive Branding
Synergies with other Businesses:

Mahindra
Mahindra
Mahindra
Mahindra

First Choice Services Ltd

Finance
Spares
Insurance Brokers Ltd

BIG IDEA
Complete
Automobil
Service
e
Provider
Manufactu
Team Unusual Suspects, XLRI
rer

First Choice of Future

LOCATIO
N

DESI
GN

WORLD CLASS
INTERIORS

AMBIEN
CE

Team Unusual Suspects, XLRI

First Choice of Future

BIKE
S

FAST
SERVICE

ONE STOP
STORE

CONVENIE
NCE

Team Unusual Suspects, XLRI

Summary

Team Unusual Suspects, XLRI

THANK YOU

Team Unusual Suspects, XLRI

ANNEXURE

Team Unusual Suspects, XLRI

First Choice Current Reach

6 Company Stores
70 Franchisee Stores
Present in 50 leading cities of India
2 Superstores at Mumbai & Pune
Expansion plans:
32 Superstores
300 Franchisee stores

Team Unusual Suspects, XLRI

Timelines Followed (Customer End)

ACTIVITY

AVERAGE TIME (In

minutes)

Pre service Inspection

15

Washing & Cleaning

25

Service Variable

120

After service
Inspection

15

Bill generation &

delivery

TOTAL

180

Team Unusual Suspects, XLRI

Process (Customer End)

Customer
goes to
single
window

Deposits
keys, reports
problems (if
any) & signs
job card

Given receipt
slip
indicating
time of
delivery of
vehicle

At the
designated
time,
customer
handed over
keys

Customer
pays at same
counter

Multiple counters- Avoid queues and shortens time taken

Customized account- Portal containing details of vehicle
Vehicle delivery in maximum 3 hours
Detailed bill of services rendered
Option of payment with credit cards
Team Unusual Suspects, XLRI

Process (Mechanics End)

Job card
+ keys
given to
supervis
or

Supervis
or
allocates
the
available
mechani
c

(Pre)Test
drive +
problems
identified
.

Servicing
done

(After)
Test
drive by
mechani
c

Team Unusual Suspects, XLRI

Complet
ed job
card +
keys
given to
supervis
or

Supervis
or
submits
the same
at the
window

How do we Promote?
Hamari Pehli Pasand
Free Service Mela- one time free service
Promotional material, discount coupons
Rewards- 100th/ 500th vehicle serviced/
bought/sold
Advertisements in local newspapers, TV,
Radio and OOH
Direct mailers via post and internet

Team Unusual Suspects, XLRI

Expected Results (Hamari Pehli

Pasand) Campaign
Awareness
Reach to millions of families across India
Realize connectedness with brand (currently unfelt)
Top of Mind recall during information search
Communicates care shown by Mahindra
Relevance
Right in line with theme- Hamari Pehli Pasand
Involves the families
Active contributor and not just a receiver of
communication
Hard automobile manufacturer
Someone that
cares
Team Unusual Suspects, XLRI

Valuation of Used Cars

Factors determining cost of an old car :
Age of the car
Mileage
Condition of the tyres
Cosmetic appeal
Number of previous owners
Colour of the car
Any accident or welding marks

Team Unusual Suspects, XLRI

Pricing of Used Cars

Year/Mileage

Depreciation of Ex Showroom prices

(Excluding Repair Cost & Insurance
Cost)

1 Year/6000 Kms

30-45%

2 Year/12000 Kms

30-45%

3 Year/18000 Kms

40-55%

4 Year/25000 Kms

40-65%

5 - 10 years/50000
Kms

55-70%

10-15 years

70% and above

Note: These are only a fair value indications. The prices

may fluctuate as per the valuation criteria already
mentioned.
Team Unusual Suspects, XLRI

Servicing of Bikes
Type of Service

Servicing
Time

Basic Cost
(Including
Labour)

1st Service/ 500-750

Km

1 hour

Rs 0

2nd Service/ 2500-2800

Km

1.5 hours

Rs 100

3rd Service/ 5000-5550

Km

1 hour

Rs 150

4th Service/ 7000-7500

Km

1 hour

Rs 200

5th Service/ 9000-9500

Km

1.5 hours

Rs 250

6th Service/
110001 hour
Team
Unusual Suspects,
XLRI Rs 300
11500 Km

Recommended Services
(Bikes)
NAME

SERVICES OFFERED

COST (In
Rs)

HIT

Check disc break oil level +

gear oil replacement +
electrical connection

149

SUPERHIT

HIT+ clutch plates checkup +

chain sprocket assembly+ front
shocker oil + rear shocker air
pressure

249

BLOCKBUS
TER

SUPERHIT+ Wheel balancing +

handle T bar alignment+ Basic
complete checkup

349

Team Unusual Suspects, XLRI

Cash Flow Mahindra

Particulars
1
2
3
Machine Upgradation For 18,00,000

Cars
Machine Upgradation For
5,40,000

Bikes
Training Cost
2,00,000 2,22,000 2,46,420
Advertising (TV)
6,72,000 2,72,000 1,36,000
Advertising (Newspapers) 15,00,000 3,75,000 1,87,500
Advertising Radio
1,60,000
40,000
20,000
Total Media Cost
23,32,000 6,87,000 3,43,500
Total Cost
48,72,000 9,09,000 5,89,920
Mahindra Cash Inflow
2,18,29,06 2,46,93,76 2,79,96,56
4
1
6
Cash Flow Per Store
1,69,57,0 2,37,84,7 2,74,06,6
64
61
46
9,53,30,7
NPV @ 20%
53

Team Unusual Suspects, XLRI

2,73,526
1,25,333
1,25,000
13,333
2,63,667
5,37,193
3,18,18,92
2
3,12,81,7
29

3,03,614
1,50,000
93,750
10,000
2,53,750
5,57,364
3,62,60,2
14
3,57,02,
850

Profit & Loss (Garage Pre

BOT)
Particulars
Revenue
Revenue From Servicing
Of Cars

1,63,20,000

Revenue From Sale Of

Second Hand Cars

1,09,99,725

2,44,84,437

1,99,79,52
0

3,00,37,738 3,68,93,4
61
1,31,22,445

1,20,19,033

1,43,14,431 1,55,99,03
9

Total Revenue
Cost
Wages
Salary
Lubricants
Other Misc Expenses
Total Cost
PBT

2,73,19,725 3,19,98,55 3,76,06,882 4,43,52,16 5,24,92,5

3
9
00

28,80,000
32,14,224
30,38,400
34,09,389 36,26,021
9,60,000
11,82,816
10,65,600
13,12,926 14,57,348
36,00,000
44,35,560
39,96,000
49,23,472 54,65,053
4,80,000
5,91,408
5,32,800
6,56,463 7,28,674
79,20,000
94,24,008
86,32,800
1,03,02,249 1,12,77,09
6
Team
Unusual Suspects,
XLRI
1,93,99,725
2,81,82,874
2,33,65,753
3,40,49,920 4,12,15,40

Maruti True Value

Organized pre-owned car brand by Maruti
Suzuki India Ltd.
Unique advantages:
India's largest certified used car dealer
318 outlets in 186 cities and growing
All car related services under one roof
Professionally trained manpower
Complete peace of mind
Team Unusual Suspects, XLRI

Future: Big.Hairy.Audacious.Goals
World class quality interiors
Dealership: Service, Reputation, Design,
Ambience & Location
Focus on convenience and fast service
One-stop store for all needs starting from
purchase, service, car consulting & selling
off
New vehicle purchase at cost of old one
Expansion to rural areas- sale of 2nd hand
tractors
Team Unusual Suspects, XLRI

Summary
New model (BOT) for:
Strategic Alliances
Procurement requirements
Win-Win proposition for Mahindra & Garages
Profitable & Sustainable business venture
Hamari Pehli Pasand campaign
Increases Awareness
Use of all mediums
New processes for training and customer service
Advantages over Competitors
First Choice Concept of the future
Benefits for Mahindra brand
Synergies with other divisions
Team Unusual Suspects, XLRI