Mahindra Mahindra in South Africa Essay example - 928 Words

Case: Mahindra Mahindra in South Africa In May 2011, Pravin Shah, the CEO at Mahindra Mahindra, was evaluating four possible options of company’s growth strategy in the South Africa. Those options included: entering into agreement with the local vendor for the contract assembly of MM vehicles, investing in its own manufacturing plant in South Africa, using South Africa as a hub for the further export of the other countries and lastly waiting and watching until enough vehicles are sold for the sustainable long term growth. Once those options were evaluated, Shah needed to present the final chosen one to the board of directors for the final approval on the best strategy for company’s growth in the South African Market. 1) Which†¦show more content†¦To date, Mahindra Mahindra shows a very strong entry-level presence in the local market. In short 6 years period, they were able to capture the trust and loyalty of the local populations. Their strategy to manufac ture and export vehicles that were suitable for local roads and, at the same time affordable for the locals, made it possible to secure the market share of 1.2% of the SUV and medium range SUV vehicles. Their localization of dealers in nine South African provinces made it possible for customers of all regions to have the direct access to the vehicle inventory. On the other hand the company faced a challenge of losing sales because of the time it took to process vehicles orders from India. 3) How attractive is the South African auto market for the growth and profitability? In the past decade or so, South Africa showed a stable economic growth among the population. Even though the growth rates are somewhat low compared to the other developing countries, it didn’t have any decline. With economic growth, more locals are able to afford to own a vehicle. As research study presented in the case shows, the buying power of the black African consumers, making the largest segment of the middle-income market, was rising. To the benefit of companies such as Mahindra Mahindra, unlike white South African population, black African consumers were more open and inclined to purchase newly introduced brands to theShow MoreRelatedMahindra in South Africa982 Words   |  4 PagesMAHINDRA amp; MAHINDRA IN SOUTH AFRICA BACKGROUND AND INTRODUCTION Mahindra and Mahindra is a leading multinational automotive manufacturer headquartered in Mumbai, India which started as a steel trading company in 1945 by two brothers J.C Mahindra and K.C Mahindra. Mamp;M has a labour force of 13000 and in 2001 profit before tax was 45 billion rupees. 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