Mahindra Group hopes to grow sales in South Africa car market

The Mahindra Group is expecting to grow sales in South African passenger car market by 50 per cent this year and is also betting big on other businesses such as IT in the country, S P Shukla, the company's chief brand officer of said on Wednesday.

Last year, the South African passenger car market had grown by 9 per cent, whereas Mahindra's sales volume in this segment shot up by 66 per cent.

"This year, we are looking to increase our sales by a further 50 per cent on the figure for 2012 in a climate where the prediction is that the total South African vehicle market will grow by only 7 per cent," Mr Shukla told PTI on the sidelines of the annual Emerging Markets Conference Board, where he was a speaker.

In South Africa, the lead business for Mahindra is automotive, with its vehicles having been sold locally since 2004. The group has set its sights firmly on the African continent as part of its growth plans.

"Mahindra has had a long and enduring relationship with the African continent and its people. With a population of a billion people and a combined annual GDP of $2 trillion, it is a very strategic market for us," Mr Shukla said.

"With 56 countries - some of which have the highest economic growth rates in the world - the continent presents immense opportunity for business," he added.

He said that the establishment of a dedicated Africa desk by Mahindra in the last couple of years had provided added impetus to grow its businesses on the African continent.

Mr Shukla highlighted how the strategy of tying up with existing businesses in some cases had made Mahindra's entry into new markets quicker and easier.

Mahindra Group is currently operating in 30 African countries with the automotive side of the enterprise doing brisk business in 25 of them.

The information technology wing of Mahindra is active in 20 countries on the continent and the generators business is already established in 12 countries.

Mr Shukla laid emphasis on Mahindra not just being a manufacturer of light commercial and SUV vehicles - areas in which it has found much success in South Africa.

"The diverse business interests of Mahindra now include aerospace, agri-business, consulting, defence, energy, farming equipment, financial services, industrial equipment, IT, leisure and hospitality, logistics, realty, retail, steel processing and two-wheelers," Mr Shukla said.

"We are the only company in the world that can supply the full range of mobility requirements from scooters and motorcycles to light commercial vehicles, SUVs, trucks, buses, farming equipment, construction equipment, aircraft and now boats and yachts," he said.

Mr Shukla said Mahindra had sold its first aircraft in South Africa recently from its range that included five- and eight-seater aircraft as well as an agricultural crop-sprayer, while 10 and 18-seat models are under development.

When Mahindra enters a country, it researches which of its various operating divisions would get most traction in the shortest time and this then becomes the lead business in that territory, he added.

When this business is well established, the company then looks for additional consumer or business-to-business opportunities for other Mahindra companies or divisions to enter that specific country.