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Anand Mahindra: the American connection

  • Author:naky
  • Source:www.diecastingpartsupplier.com
  • Release on:2015-06-25
For his latest automotive venture, Anand Mahindra has turned Asia’s conventional industrial wisdom on its head.

Instead of assembling the product — the new GenZe electric scooter — with low-cost factory labour in Asia and exporting it to the US, India’s Mahindra & Mahindra has opted for what it calls an “all-American product”. It was designed in Silicon Valley and will be made in Ann Arbor, Michigan under the supervision of 60 relatively expensive engineers, with components from across the globe.

“This is the new animal that a global new product manufacturing set-up is going to be,” says Mr Mahindra, the Harvard-educated billionaire who took the helm of the $16bn Indian conglomerate as chairman three years ago.

“We really felt that India didn’t have the start-up atmosphere?.?.?.?We had a number of people join us from [US electric carmaker] Tesla Motors, for example, because they were excited about this and the Valley allows people just to migrate and to try out new things.”
The GenZe is a modest project for the time being. The $3,000 scooter with a computer touchscreen and power sockets for cellphones and laptops is aimed at students and young professionals and is expected to launch in Berkeley, California and Portland, Oregon in a few months, with initial annual production capacity of 20,000 units.

But the plan exemplifies the challenges facing the business models of traditional Indian manufacturers such as Mahindra, and illustrates the difficultiesNarendra Modi, India’s prime minister, will have in creating millions of jobs through his “Make in India” campaign of promoting the country as a low-cost alternative to China.

The Mahindra conglomerate’s existing US businesses are based largely on the competitiveness of Asian manufacturing and services: the group is the world’s largest tractor brand by volume and sells the vehicles made in India, Japan and South Korea through 525 American dealerships aimed primarily at smaller enterprises and hobby farmers. Tech Mahindraprovides IT services to 360 of the Fortune 500 companies.

Interviewed in his Mumbai of?fice, Mr Mahindra is as cheerful as ever under his trademark shock of white-streaked hair, but he is grappling with an upheaval in global manufacturing that has seen the rapid rise of automation, more demand for high-tech products, and intense competition in an Indian domestic automotive market beset by economic uncertainty and unpredictable monsoon rains.

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