Mahindra: The tractor maker who has John Deere on the run

by Dave

Mahindra assembles its Cimarron 4×4 in Uruguay. Also, potential to sell its Scorpio SUV in LatAm. Scorpio was conceptualized and built for USD 150 million. At a fraction of the cost of other SUVs.
Anand Mahindra was at the World Economic Forum in Davos, Switzerland, last year when Robert Lane, chairman of U.S. farm equipment concern Deere & Co., approached him.

“I’ve been to your dealerships and seen all your manuals,” he told Mr. Mahindra, whose Mumbai-based Mahindra & Mahindra Ltd. has been taking on the maker of John Deere tractors in the U.S. market.

Well, replied Mr. Mahindra with a laugh, “that’s good news and bad news.”

The bad news is that the world’s biggest tractor maker has put Mahindra & Mahindra in its sights. The good news, both for Mr. Mahindra and India, is that a behemoth like John Deere is worried enough to bother.

Indian manufacturers have never troubled the sleep of executives in the rich world. India is well known for its outsourcing and information technology skills – even, more recently, for the global shopping sprees of its acquisitive billionaires – but its manufacturers are minnows beside the sharks of China, South Korea and Taiwan. Gradually, that has begun to change.

Mr. Mahindra, 52, is one of the reasons. The urbane, Harvard-educated business leader has taken his family firm from a staid domestic maker of jeeps and tractors to a global player with ambitions in everything from SUVs and auto parts to movie making and time share resorts. In naming him Businessman of the Year for 2007, Business India magazine called the M&M managing director “the poster child for the global Indian.”

His M&M has dealerships in 25 countries and subsidiaries in Europe, Australia and South Africa. Its revenue has grown 20-fold in 17 years.

Already the largest tractor maker in the world’s largest tractor market – India – it has become third largest in the world by units sold and plans to be first by 2010. It makes India’s most popular SUV, the Scorpio, and has joined with France’s Renault to make the Logan, a no-frills sedan for Indians. It plans to launch the Scorpio and two models of pickup truck in the U.S. market next year.