8/4/2019 Scorpio 2

1/15

SCORPIO

Developing a World-class Product for the Indian Market

8/4/2019 Scorpio 2

2/15

SWOT Analysis of M&M

Strengths

Supply Chain Size Advantages Economies of Scale Cost Advantages Technology Customer Loyalty Brand Name Strong Research &Development

Weaknesses

High dependence onrural & semi-urbanmarkets Very few products inthe market Image Baggage of toughvehicles

OpportunitiesNew TechnologiesNew ProductsNew Markets

International Expansion

Threats Intense Comptition Substitute Products

8/4/2019 Scorpio 2

3/15

Q. Can the success of Scorpio to some extent, be attributed tothe shift in preferences of the Indian consumer(a move towardsutility vehicles)

A. YES YES YES!!!

8/4/2019 Scorpio 2

4/15

Why?

Consumers want to consume premium imagery at pricesaffordable to them Consumer insight from market research

done by M&M Upper middle class sought products that indicated their statusas well as matched their inner sense of achievement. Consumer wanted:

Big size stood for status Latest technology To feel the sheer thrill and passion of driving an SUV Luxury International looks

8/4/2019 Scorpio 2

5/15

And..Mahindra Scorpio satisfied these conditions and in turn the

consumerThe rise in the demand for UVs proves this.

8/4/2019 Scorpio 2

6/15

Q. Is there a blurring of a UV vs. a car, B, C and D segmentsin the Indian car market?

A. Yes again

8/4/2019 Scorpio 2

7/15

The consumer does not demarcate segments anymore.He wants a bit of everything:

High end looks of the D segment Features of the C segment Affordability of the B segment

Hence, there is a demand for Crossover Vehicles which can bedefined as vehicles built on a car platform and combining, inhighly variable degrees, features of a sport utility vehicle (SUV)with features from a passenger vehicle, especially those of astation wagon or hatchback.

8/4/2019 Scorpio 2

8/15

Q.Affordability has gone up, given the easy availability ofloans, and consumers are upgrading even their firstpurchases. What effect is this likely to have on the Indiancar market, particularly M&M?

A. Increase in affordability would lead to increaseddemand of automobiles in India

8/4/2019 Scorpio 2

9/15

How? People who dont have the buying capacity would go in for auto

loans because of easy availability of loans. Also, captivefinancing option has made it even easier for people to buythrough loans. But as the demand increases, demand for innovative car options

would go up. Mahindra will have to come up with some innovation in allcategories of automobiles & not rely on just SUVs and that tooon Scorpio.

8/4/2019 Scorpio 2

10/15

Bank Name Interest rate range Rate Type

HDFC Bank Car Loan 11.25% fixed to 15.25% fixedMonthly reducing

balance

ICICI Car Loan 9.75% fixed to 11% fixed Monthly reducingbalance

Axis Car Loan 9.25% fixed to 12% fixedMonthly reducing

balance

Reliance Car Loan 10.5% fixed to 12% fixedMonthly reducing

balance

SBI Car Loan

1st year : 8% fixed

2nd and 3rd year : 10% fixed

4th and 5th year : 11.25% floating

6th and 7th year : 11.5% floating

Daily reducing balance

Bank of Baroda Car Loan

For loans of tenure upto 3 years: 9.75%

floating

For loans of tenure over 3 years: 10.25%

floating

Daily reducing balance

Canara Bank Car Loan 11% fixed Daily reducing balance

Oriental Bank Car Loan 11% fixed Daily reducing balance

Punjab National Bank Car Loan 11% fixed Daily reducing balance

Union Bank Car Loan

Upto 3 years: 11% floating

4 years or 5 years: 11.25% floating

13.25% floating rate for old cars

Daily reducing balance

Banks car loans

I di C S di 2009

http://www.bankbazaar.com/hdfc-car-loan.htmlhttp://www.bankbazaar.com/icici-car-loan.htmlhttp://www.bankbazaar.com/axis-car-loan.htmlhttp://www.bankbazaar.com/reliance-car-loan.htmlhttp://www.bankbazaar.com/sbi-car-loan.htmlhttp://www.bankbazaar.com/bank-of-baroda-car-loan.htmlhttp://www.bankbazaar.com/canara-bank-car-loan.htmlhttp://www.bankbazaar.com/oriental-car-loan.htmlhttp://www.bankbazaar.com/punjab-national-bank-car-loan.htmlhttp://www.bankbazaar.com/union-bank-car-loan.htmlhttp://www.bankbazaar.com/union-bank-car-loan.htmlhttp://www.bankbazaar.com/punjab-national-bank-car-loan.htmlhttp://www.bankbazaar.com/oriental-car-loan.htmlhttp://www.bankbazaar.com/canara-bank-car-loan.htmlhttp://www.bankbazaar.com/bank-of-baroda-car-loan.htmlhttp://www.bankbazaar.com/sbi-car-loan.htmlhttp://www.bankbazaar.com/reliance-car-loan.htmlhttp://www.bankbazaar.com/axis-car-loan.htmlhttp://www.bankbazaar.com/icici-car-loan.htmlhttp://www.bankbazaar.com/hdfc-car-loan.html

8/4/2019 Scorpio 2

11/15

India: Consumer Spending, 2009S.

No

Consumer spending (excluding institutional and

government spending) Size in 2009 (in

US$ billion)

Size in

2009

(in US$

billion)

Size in

2014

(in US$

billion)

Likely

Ranking

in 2014

1 Food and grocery 260 325 1

2 Healthcare 34 55 2

3 Apparel and home textiles 32 43 4

4 Education (K-12, higher education & vocational) 28 45 3

5 Telecom 25 41 5

6 Jewellery & watches 25 34 7

7 Personal transport (vehicles + fuel + repairs) 24 37 6

8 Travel and leisure 12 20 89 Consumer durables and IT products 11 17 9

10 Home (furniture, furnishings, etc.) 10 15 10

11 Personal care 10 14 11

12 Eating out 5 7 12

(source: technopak survey)

8/4/2019 Scorpio 2

12/15

8/4/2019 Scorpio 2

13/15

Economic factors

Increased access to credit and lower interest loans.

Investment in Infrastructure spending can boost the commercialvehicles segment.

Growing working population (441 million people in 2015/16)

Upward migration of household income levels (600 millionpeople have annual income of more than $10,200)

Middle class expanding by 30 - 40 million every year

The availability of car loans, affordable rates of interest, smoothrepayment facilities and the deductions offered to the customers

by the retailers.

8/4/2019 Scorpio 2

14/15

Social Factors

Rapid Urbanization of semi urban regions

Rising aspirational levels. Improvement in livingstandards of middle class

Increased spending on Fashion & lifestyle comforts. Seeking Value for money- consumer behavior

Increasing customer emphasis on aesthetics andcomfort.

A perfect marriage of rise in disposable income anddemographic dividend (From US$ 556 per annumUS$ 1150 by 2015)

8/4/2019 Scorpio 2

15/15

Origin

of crossover suvs The term crossover began as a marketing term, and a 2008 CNNMoney article

indicated that "many consumers cannot tell the difference between an SUV and a

crossover."[A January 2008 Wall Street Journalblog article called crossovers

"wagons that look like sport utility vehicles but ride like cars.

http://en.wikipedia.org/wiki/CNNMoney.comhttp://en.wikipedia.org/wiki/CNNMoney.com