Mumbai: Eight years after Mahindra and Mahindra Ltd entered India’s intensely competitive two-wheeler market, the Anand Mahindra-led firm is re-charting its course.
As part of a newly-crafted strategy, the maker of Gusto scooters and Centuro motorcycles plans to target the premium segment even as it scales down the mass market business, in a bid to become profitable, the company’s top officials said at a press meet on Tuesday.
As part of the move, Mahindra has bought a controlling stake in Classic Legends Pvt. Ltd, which recently acquired British motorcycle company BSA Co. along with all its existing global brand rights. Classic Legends has also signed an exclusive brand licence agreement for the iconic Czechoslovakian brand called Jawa.
Mahindra also owns 51% in Peugeot Motocycles.
“Our plan is to focus more on the premium niche segment as we move forward,” said Pawan Goenka, executive director at Mahindra and Mahindra. He said the company aims to co-create a lifestyle company and allow customers to relive the experience of owning some classic motorcycle brands.
Owing to the cult status the Jawa brand enjoys in India, it will address domestic markets, said Rajesh Jejurikar, chief executive and president two-wheelers and farm equipment business at the firm.
It will produce and launch Jawa motorcycles at its facility in Pithampur, Madhya Pradesh, in two years’ time. The brands will be retailed separately, outside the Mahindra fold.
Meanwhile, Mahindra will also resurrect the BSA brand in the US and European markets. It cannot introduce the brand in India as BSA is locked in a legal dispute with an Indian firm and the matter is sub judice, said Goenka.
Mahindra has restructured its two-wheeler over the last one-and-a-half years to cut losses. Mint first reported on the company revamping the business on 7 June.
In 2014-15, the company reported a loss of Rs528.87 crore, wider than the Rs459.29 crore loss reported a year ago, according to corporate database provider Capitaline.
As part of the realigned strategy, Mahindra has cut the overall capital infusion to Rs200-300 crore, almost half of what it infused the pervious year, Goenka said.
“It’s a step in the right direction. It’s tough for any new entrant to break into the mass market segment. Targeting the premium niche segment, which is relatively less crowded, should pay off,” said an analyst at a domestic brokerage who declined to be named.