Anand Mahindra, an Indian tycoon and the face of Indian capitalism but most importantly he is head of Mahindra & Mahindra, the dominant power of the Indian SUV(Sport Utility Vehicle) market. It is not huge, being the fifth-biggest Indian family group by sales ($16 billion),17th largest Indian firm by market capitalisation ($15 billion) and the largest tractor firm worldwide. For an Indian firm it is a rare success in the manufacturing industry, with little debt, high returns and technology created at home. In addition to this, their high capital efficiency have enabled them to sustain growth through generations of the family run business, despite only 25% of the business being owned by the family and its allies. With foreign investors soon to take control of the business, what next for the Indian powerhouse?
Many fear that Mahindra & Mahindra will follow in the footsteps of Nokia as they crumble from an Indian sovereignty to a fallen giant. With a market share of 41%, it seems unlikely that they will come crashing down, but as India grows and consumers become richer, exported cars are becoming a growing trend around India. However the top end of the hierarchy at Mahindra & Mahindra are aware of this and have begun to build a safety net to fall back on as they attempt to grow their already large business. Mr Mahindra was quoted saying "Capitalism only works when the best firms rebel a bit and take some risks." Indeed he has backed up his statement with action as over the past couple of years they have invested into many different areas around the world including South Korea, America and Britain. Through these investments they have merged vertically and horizontally therefore gaining technological advances, economies of scale and sustained growth for the firm. Mr Mahindra and his team have secured the future of his family's business and keeps his face as the shining symbol of Indian capitalism.
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| Mr Mahindra and his Mahindra Scorpio (The Economist) |
Many fear that Mahindra & Mahindra will follow in the footsteps of Nokia as they crumble from an Indian sovereignty to a fallen giant. With a market share of 41%, it seems unlikely that they will come crashing down, but as India grows and consumers become richer, exported cars are becoming a growing trend around India. However the top end of the hierarchy at Mahindra & Mahindra are aware of this and have begun to build a safety net to fall back on as they attempt to grow their already large business. Mr Mahindra was quoted saying "Capitalism only works when the best firms rebel a bit and take some risks." Indeed he has backed up his statement with action as over the past couple of years they have invested into many different areas around the world including South Korea, America and Britain. Through these investments they have merged vertically and horizontally therefore gaining technological advances, economies of scale and sustained growth for the firm. Mr Mahindra and his team have secured the future of his family's business and keeps his face as the shining symbol of Indian capitalism.
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