M&M’s Goenka Points To More Synergy With Arm Ssangyong For Technology, Product Development

A new petrol engine, product platform, a more powerful electric powertrain and a hybrid engine option. Mahindra & Mahindra Ltd's (M&M) collaboration with its subsidiary Ssangyong Motor, which has so far been used only to set up a common platform for engine development, is expected to yield all this and more.

M&M completed the acquisition of a majority stake in South Korea's Ssangyong in 2011 with the intention of increasing its presence in the global passenger car market. Since then, however, only one car – the Ssangyong Rexton – has been launched in India.

Ssangyong, which turned profitable for the first time since 2007 in the year ended December 2016, is currently developing a 1.5-litre petrol engine in collaboration with M&M, Executive Director Pawan Goenka said at a press briefing on Wednesday.

Ssangyong's improved sales performance has been driven by the popularity of its Tivoli sport utility vehicle. In December, the company sold over 9,000 units of the Tivoli for the first time since it was launched.

M&M has acquired the platform licensing from Ssangyong for Tivoli, and is currently developing a product, codenamed S201, on the platform. The vehicle, presumably a compact sport utility vehicle, is expected to be launched in 2018.

Goenka refused to put a timeline on the launch of this vehicle, but stressed that the design elements for the two would be very different.

In another area of collaboration, Ssangyong and Mahindra intend to work on developing a 380-volt powertrain for an electric vehicle. The two companies are yet to “sign the dotted line”, according to Goenka. Currently, M&M has a 48-volt, and 72-volt powertrain for electric vehicles, which are yet to take off in a big way in India.

Finally, Ssangyong will also weigh in on M&M's efforts to develop a 48-volt hybrid option for its vehicles, as well as on advanced technologies like reducing vehicle weight, dual clutch transmission, e-clutch, and connected car, Goenka said.

Changes Afoot In M&M's Farm Equipment Business

M&M, the world's largest tractor manufacturer by volumes, is looking to diversify its farm equipment portfolio, by raising the sales contribution of equipment apart from tractors, said Rajesh Jejurikar, president and chief executive of M&M's farm equipment and two wheeler businesses.

It also aims to raise its overseas revenue in the segment to 50 percent by 2020 from the 37 percent expected in the current financial year.

The rationale for wanting to diversify its portfolio, according to Jejurikar, is that of the $156 billion market for farm equipment globally, tractor sales account for only $60 billion.

M&M plans to raise the share of equipment other than tractors in its total farm equipment volumes to 20 percent by 2018-19 from 14 percent this financial year. M&M's other equipment in the segment include transplanters, harvesters, and tillers, all with much higher price tags than that of tractors.

The change in the volume mix is not, however, likely to result in a change in margins, said Jejurikar.

Intermediate Commercial Vehicles Next Year

M&M, which currently sells light commercial vehicles, utility vehicles for commercial use, and an entire portfolio of heavy commercial vehicles, is currently developing three trucks in the intermediate segment.

The three products, which will fill the gap in M&M's commercial vehicle portfolio in the 6-16 tonne segment, will be launched in 2018, according to Rajan Wadhera, the president and chief executive of the company's trucks and buses division.

So far this financial year, the company has sold 1.58 lakh commercial vehicles, 6 percent higher than the same period a year ago.