Mahindra and Mahindra to use SsangYong brand to expand portfolio

JAIPUR | MUMBAI: Mahindra and Mahindra, India’s leading manufacturer of utility vehicles, is leveraging its overseas unit SsangYong to develop new products and expand its portfolio seven years after acquiring the South Korean brand.

The company has set itself a target of selling 9,000 units a month from three all new products planned this financial year, which have been developed using engineering assistance from Mahindra’s Korean counterparts and Italian car-design firm Pininfarina. The Mahindra Group acquired the Italian company three years ago.

“It will be fair to say that this is the beginning of a new range of global products that Mahindra will be bringing in with a partnership with SsangYong, and eventually an alliance with Ford, in the coming years,” said Pawan Goenka, managing director at Mahindra and Mahindra. “Apart from sharing products, we also plan to share engine, technology and connectivity solutions, including the hybrid solution.”

By sharing vehicle architectures, the company can come out with new products at much lower costs, Goenka told ET.

“On its own, Mahindra would never have invested in a low-volume product like Alturas; it is because of SsangYong we have been able to enter this space,” Goenka said.

According to several people in the know, Alturas is the first of at least 4-6 new products Mahindra intends to bring in, harnessing its association with Ssangyong and its recent alliance with Ford. For Mahindra, that would mean the widest SUV line-up in the country, with a vehicle priced at about every Rs 50,000.

Alturas G4 launched on Saturday is essentially the latest generation Rexton, an existing product in the Korean market, adjusted for India. SsangYong originally developed this vehicle at an expense of $230 million (Rs 1,625 crore). The vehicle will be the new flagship for Mahindra and lead its fresh attempt at tapping the premium SUV segment, which has established products such as the Toyota Fortuner and Ford Endeavour.

Analysts say that the benefits from this synergy are not limited to cost rationalisation. The association of these products with the Korean company improves brand perception and helps justify price tags that Mahindra is not conventionally associated with.

“How much you can do with purely domestic brand extension is questionable. But with this partnership, they are not going to sell it as a purely domestic brand,” said Jeffry Jacob, a partner at consultancy firm Roland Berger. “They are going to be talking about the fact that this (vehicle) has been taken up from SsangYong. And, therefore, they’ll be able to potentially move into that price segment.”

The first of the three products to be developed by tapping into the global ecosystem was the Marazzo, which Mahindra launched earlier this quarter. Alturas is the second.