The success of automotive giant Mahindra’s South African subsidiary in producing localised vehicles with customer input is serving as a model for adaptation at its plants across the globe, according to a senior company official.
“South Africa has the opportunity to explore the most through understanding customer insights. South Africa has contributed immensely to the auto talent we have at Mahindra. Because of our experiences in South Africa, the way we are now adapting our approaches in certain markets where we are going is deeper; more local; and getting to spend time on customer insights,” Sachin Arolkar, Head of International Operations in the Automotive Division at Mahindra, told PTI.
“We are giving the companies the freedom to work locally rather than imposing something to experiment with and being OK to fail with that. These are all learnings out of South Africa,” he said after a media launch event near Pretoria where the new Mahindra vehicle range and the company’s new logo were unveiled.
Commenting on the success of customised personalisation of the South African-produced vehicles, CEO of Mahindra SA Sanjay Gupta said it was inspired by the local buyers.
“The Karoo range of three pickups that we have just released are inspired by the renowned desert in South Africa. This is a very clear business management case study, where we have created something around the local tastes in a smart way which has actually gotten to the imagination of local people. This is in line with Mahindra’s vision of thinking local, acting global,” he said.
Gupta also highlighted how the local subsidiary of Mahindra was assisting the South African economy by helping meet the fundamental needs of contributing to the creation of employment opportunities as well as the manufacturing index and enhancing the skills among the local community.
“Besides this, wherever we are given the opportunity to play a role in terms of helping out people who are suffering, we do so through partnering with NGOs. It’s about being more responsible and inclusive about growth,” he said.
The Covid-19 lockdown and unprecedented violence over the past two years in the Kwazulu-Natal province where the Mahindra assembly plant is based did not deter the company from improving in sales while almost all other competitors saw declines.
Gupta said that after starting up its assembly facility in the port city of Durban in 2018 with about 200 units per month, the factory is now producing almost 500 units per month.
“Our first phase of expansion will take this to around 650 units and phase two to around 900 units per month,” he added.
Gupta attributed this to having the right networks and backend facility as well as having the right focus on after-sales operations.
He said the concentration at this stage was in the southern African region because of the localisation benefits available in South Africa.
“Exporting vehicles from South Africa to other countries in Africa does not have the similar benefit. It’s better that they get transported directly from India to the respective countries at this stage,” he said.
Arolkar said that it was important to consider long-term goals for exporting out of South Africa not only into the rest of the African continent, but also to other countries.
“We have certain thoughts and the government laying down its long-term policies will be a great help for our plans, not only for the current range of products, but also for the forthcoming products that we will be working on with South Africa as a key player in this entire space,” Arolkar said.
Gupta said the plan to enter the South African market for its farming products still had a long way to go in a highly entrenched competitive market.
“We succeeded in retailing over 50 tractors in the last month, which is a good sign, but the total of about a hundred over the past year is nowhere where we want to be. We are in it for the long haul and hope to have a different picture in about three years’ time,” Gupta said.
Arolkar explained how the global supply chain was affected by the pandemic and more recently the war in Ukraine has created issues.
“Suddenly, the demand spiked and we saw shortages happen. Sometimes it is semiconductors; sometimes something else. We came up with some innovative measures to mitigate it. Then suddenly the China lockdown happened and the constraint moved to certain elements in the supply chain,” he said.
“Currently the challenges have shifted to more longer-term things such as shipping liners,” he added.
Arolkar said the global unveiling of the new Mahindra logo and new vehicles for the next two quarters took place because of the company’s confidence in addressing these challenges.