Opinion:How Mahindra and Tata fought off global competition

As you’ve probably noticed, this September marks our silver anniversary, and in this month's magazine you’ll find a rather interesting story comparing today’s Indian automotive industry to what it was 25 years ago. The stats are fascinating and got me thinking about how things have changed for homegrown carmakers.  

Hindustan Motors has no vehicles to offer anymore. But look at Mahindra and Tata Motors – constantly fighting for the third spot on the podium of India’s largest carmakers. And that’s despite the onslaught of foreign carmakers. 

The reasons for their success can be attributed to numerous factors, but for me, three really stand out.

The first, quite ironically, is the arrival of international brands. Before Suzuki, there was hardly any supplier base; it was the Japanese brand that kick-started its development. Then, the arrival of so many more players meant competition heated up, and as the saying goes, competition breeds success.

Former Mahindra Group chairman Keshub Mahindra once told us, “We begged the government not to open up suddenly to competition. Thank God it didn’t listen to us.” Indeed, the arrival of global giants with modern and sophisticated products, local manufacturing and multiple models pushed our carmakers, who have clearly emerged as winners. So, the next time you want to buy a product and help an Indian company, go out and buy the best one out there.

The second reason for Mahindra and Tata Motors’ success is that both invested in R&D and produced vehicles that were tailor-made for Indians. That’s not to say others didn’t; Toyota certainly did so with the Etios duo; Nissan even chose India for Datsun’s global revival, with models built for the country. But while some aspects were ‘Indian’, others clearly were not and force-fitted to align with other global concerns. 

That brings me to the third reason: the lack of global pressure. Mahindra does well in a few foreign markets, such as South Africa, but the brand isn’t going all out with a major global expansion despite world-class SUVs and interest from various markets. Tata Motors had a wide-reaching global business with cars sold across continents and in advanced European markets like Spain and Italy. But these operations were either scaled down or winded up. 

Because of a limited global presence, Mahindra and Tata Motors’ assets can be aligned with domestic needs. Product planners are thinking only about the Indian landscape; engineering is developing for local buyers, and with just a handful of other markets to service, the turnaround time for product development is super quick. Tata Sons chairman N Chandrasekaran recently said in an interview that their first electric car, the Tigor EV, was ready in one year! That’s the time it can take a global giant to simply greenlight a project. Of course, the electric Tigor was far from perfect, but it met the bare minimum requirement of the customer – the Indian government. 

This lack of global pressure is in stark contrast to international brands, which have multiple markets to juggle. Even those with local engineering capabilities have some global scenarios to bear in mind. So, should our local heroes stay local, then? Certainly not. They must go global, but just like they seem to be doing so now, in a deliberate manner.

Also see: 

Opinion: Why the Thar should remain a niche and halo brand

Opinion: Why Indian automakers should enter real estate