Mahindra in South Africa Essay

Words: 988
Pages: 4

MAHINDRA & MAHINDRA IN SOUTH AFRICA
BACKGROUND AND INTRODUCTION
Mahindra and Mahindra is a leading multinational automotive manufacturer headquartered in Mumbai, India which started as a steel trading company in 1945 by two brothers J.C Mahindra and K.C Mahindra. M&M has a labour force of 13000 and in 2001 profit before tax was 45 billion rupees. Currently the company has also extended its operations to small turbo prop aircraft and has a presence in the transportation media across land, sea and sky. M&M see’s South Africa as a growth market which is competitive and fragmented. M&M will also use South Africa as a globalization strategy.
Shah is considering the following four options: * Signing an agreement with a
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M&M will take the opportunity to lead in shaping industry structures, segmenting markets and establishing brands. Africa and Asia were the only two economies that grew during the recession meaning that these countries were resilient in withstanding financial shocks since it’s a cash based economy. The boom in commodity prices in addition to having the rich mineral deposits and oil reserves will also serve as an advantage in M&M using South Africa as a hub.
In the short run, Shah should consider using South Africa as a hub Own manufacturing
No taxes will be paid by enjoy tax rebates from APDP. Prices of vehicles will decrease and attract more customers.
No unwarranted lead time for delivery of own manufacturing will be shorter.
M&M will practice “Just in time” . That is as and when orders are received for manufacturing instead of stocking up the vehicles.
Since M&M will be manufacturing its own vehicles it will use South Africa as a hub to export to other countries.
Efficient after sales services.
The business environment is enabling enough for diversification. Diversification into areas such as mining or oil exploration as well as the agricultural industry. For instance an Indian company called Accelor Mittal is opening up an iron ore mining company in Sierra Leone.
M&M will localise the content of the production of vehicles to suit the South African market.
South Africa as an agro based industry will give