Mahindra Suddenly The Talk of The Town

[Ming]

Mahindra Suddenly The Talk of The Town
David Kiley
Business Week



Indian pickup and SUV maker Mahindra & Mahindra has been quietly gearing up to launch its brand in the U.S. in early 2010. But the company has been anything but quiet this week.

First, just-auto.com reports that the company is in talks with General Motors about its Hummer brand. GM has said that it is exploring options on Hummer whose gas guzzling nature is suddenly very much out of fashion with American consumers. Also, GM is out to raise cash. The other news on Mahindra is that Wall Street investment bank Goldman Sachs reported that it bought a 3.72% stake in the Indian company last month for $172 million.

Mahindra had surfaced in the discussions with Ford about possibly buying Jaguar and Land Rover. But Mahindra rival Tata walked away with the two British brands.

Mahindra & Mahindra is planning on launching is diesel powered pickup and SUV in the U.S. in the first quarter of 2010. That scheme, of selling high fuel economy pickups and SUVs through more than 200 dealers who have signed up, is getting somewhat more complicated given the premium that oil companies are charging for diesel fuel relative to regular petrol.

The vehicles are being launched via Global Vehicles, an Alpharetta, Ga.-based company. Though Mahindra & Mahindra will be new to most vehicle buyers, it is a brand that is no stranger to tractor buyers. M&M tractors have been sold in the U.S. for about a decade, and they hold the no. 3 market share. Indeed, satisfied tractor owners are considered to be the likely first wave of buyers of Mahindra pickups and SUVs.

Buying Hummer may sound like a bad idea. But Mahindra is a truck and SUV specialist, and could possibly manufacture them more cost effectively, and with diesel engines to make them more fuel efficient.

Source: http://www.businessweek.com/autos/au...ra_sudden.html

[eosandov]

Well, I hope they buy the HUMMER divsion, that will mean some much needed cash for GM.

[windvale]

The current leadership of GM just keeps selling off the assets. What a shame.

The nightmare continues...

[Hitman1970]

On a recent flight to DC I sat next to a financial consultant. I started talking about the woes of the Big Two. (Chrysler is doomed.) He was far more interested in talking about two companies. Mahindra and Tata motors.

He framed the discussion in this way. He asked how many autos do we in the US for every one hundred people? The answer is about 70 for every hundred man, woman, and child combined.

He then asked how many cars for every one hundred Chinese or Indian people? The answer was about two or three cars for every one hundred people from China or India.

The U.S. replacement market is not appealing to investors. They are drooling at the thought of the Chinese and Indian markets.

[Hunid Racks]

Originally Posted by Hitman1970

On a recent flight to DC I sat next to a financial consultant. I started talking about the woes of the Big Two. (Chrysler is doomed.) He was far more interested in talking about two companies. Mahindra and Tata motors.

He framed the discussion in this way. He asked how many autos do we in the US for every one hundred people? The answer is about 70 for every hundred man, woman, and child combined.

He then asked how many cars for every one hundred Chinese or Indian people? The answer was about two or three cars for every one hundred people from China or India.

The U.S. replacement market is not appealing to investors. They are drooling at the thought of the Chinese and Indian markets.

You know your story raises some questions.

With such markets like that out there, why does Mahindra want to enter the US?

Or is it that the US market is being managed so poorly by those that should it's just like shooting fish in a barrel?

BTW, Mahindra would be a perfect match for Hummer. They would get an instant dealer network and GM would likely get away from a liability of shutting the dealerships down.

[Hitman1970]

Originally Posted by Hunid Racks

You know your story raises some questions.

With such markets like that out there, why does Mahindra want to enter the US?

Or is it that the US market is being managed so poorly by those that should it's just like shooting fish in a barrel?

BTW, Mahindra would be a perfect match for Hummer. They would get an instant dealer network and GM would likely get away from a liability of shutting the dealerships down.

We may be a replacement market, but imagine the prestige back home for Indian and sure to follow Chinese companies, if they can get "rich" Americans to buy their rides.

[SDVite]

Originally Posted by windvale

The current leadership of GM just keeps selling off the assets. What a shame.

The nightmare continues...

Why don't they sell off some of the board?!

[doh]

There was just another Mahindra commercial on "This Week in NASCAR", about thier tractors but I have been seeing more and more of them lately

[milton112c]

Originally Posted by Hunid Racks

You know your story raises some questions.

With such markets like that out there, why does Mahindra want to enter the US?

Entering the US market is the hardest so if a company can come in and be succesful it puts the company on the world stage. e.g.- toyota

[milton112c]

Originally Posted by SDVite

Why don't they sell off some of the board?!

I just wrote a post about that in the Citibank thread. Wagner and the board of directors need to go!

[the_smurf2008]

Mahindra Tractors are well known here, and the US is the Largest auto market in the world (for now) I would guess that people familiar with their farm implements would give the truck pictured a look.

[PhishPhood]

Originally Posted by Hitman1970

On a recent flight to DC I sat next to a financial consultant. I started talking about the woes of the Big Two. (Chrysler is doomed.) He was far more interested in talking about two companies. Mahindra and Tata motors.

He framed the discussion in this way. He asked how many autos do we in the US for every one hundred people? The answer is about 70 for every hundred man, woman, and child combined.

He then asked how many cars for every one hundred Chinese or Indian people? The answer was about two or three cars for every one hundred people from China or India.

The U.S. replacement market is not appealing to investors. They are drooling at the thought of the Chinese and Indian markets.

Good point and this is a key for all the vehicle makers.

In the US there are about 305 million of us. When you discount that number for children, the aged, the infirm and the incarcerated ( the largest number in the world ) the 'potential' number of drivers is about 250-260 million citizens. We currently have about 265 million vehicles on the roads. DING!!! One for one. All our sales are essentially replacement sales. Only the general growth of the population will increase sales. Saturated.

In China, doing the same math, with a population of 1.4 Billion people there is about 1 vehicle for every 7 potential drivers.

In India, same math, with a population of 1.1 Billion people there is one vehicle for every 17 potential drivers.


Less restrictions and less oversight. HUGE upside potential in Asia and India.
Unions, EPA, Environmentalists, Stockholders, Analysts, FTC, SEC and very small upside potential.

Door A or Door B?

[Motownr]

Great post.

[Rocket 88]

Originally Posted by Ming

Buying Hummer may sound like a bad idea. But Mahindra is a truck and SUV specialist, and could possibly manufacture them more cost effectively, and with diesel engines to make them more fuel efficient.

So M & M can figure out a way to save Hummer by introducing diesel engines and GM can't?! DOH!!!

OK, I get why they want to sell Hummer but its disappointing. "Creating" the civilian Hummer was a brilliant move to give GM a name that could compete with Jeep with real street (uh, I mean off road) cred.

[blkwrxsti]

Originally Posted by SDVite

Why don't they sell off some of the board?!

He said sell off the ASSets, not the ... umm... liabilities?