[South Africa] Mahindra eyes growth and expansion as demand rises
03-05-2018 06:17:28 | by: Bob Koigi | hits: 3044 | Tags:

Mahindra South Africa is gearing up for a new phase of growth and expansion in South Africa.

The Indian vehicle manufacturer – arguably the dominant manufacturer of SUVs and pick-ups in India – ended its financial year in March 2018 with a healthy growth of 12.7% over financial year 2017. This represents a compound annual growth rate of 19% over the past two years.

“Measured in terms of our sales over the past five years and removing smaller brands with annual sales of less than 1 000 units, Mahindra is one of the five fastest growing brands in South Africa,” says Avinash Bapat, Chief Financial Officer for Mahindra South Africa.

According to Bapat, Mahindra has shown a compound annual growth rate of 4.6% over the past five years, driven in part by its rapid introduction of new models such as the Mahindra KUV mini-SUV, the TUV 300 and the upgraded Pik Up range.

And while Mahindra has grown its sales and reach, the South African automotive market has contracted by 2.9% over the same period.

According to the National Association of Automobile Manufacturers of South Africa (Naamsa), the general market showed a slight improvement April. It reports an increase of 3.6% in overall vehicle sales to 36 346 units for the month, with a contraction visible in the light commercial vehicle market. The LCV market declined by 1.2% compared to the same month last year.

In the same month, Mahindra South Africa has shown a growth of 26% in retail sales – compared to April 2017 – and a solid start to its new financial year.

The new Mahindra Pik Up is available in a choice of single- and double-cab models, which has helped Mahindra improve its standing in the bakkie ranks by appealing to both the leisure and commercial markets. In the last year alone, Mahindra has moved from eighth to sixth place in the overall pick-up sales figures, beating several older and more established brands.

“Since entering the market in 2004, Mahindra has slowly and organically grown its market share and reach in South Africa and neighbouring countries,” says Rajesh Gupta, the newly appointed CEO of MSA, who joins the company after a successful career at Mahindra in India.

“In the past two years, however, we have more aggressively introduced new models and extended our reach in Southern Africa in step with our long-term strategy of becoming a significant African automotive player.

According to Mr Gupta, Mahindra South Africa will soon announce details of a local assembly facility for certain Mahindra vehicles for the local and export markets.

“For the next step in our strategy of becoming a truly South African automotive player, we will start with the assembly of the Mahindra Pik Up on local soil. This will offer us a sound footing on which to further entrench our South African sales success.”

Mahindra’s move to local vehicle manufacturing will be supported by the expansion of its range of products and services in South Africa.

Globally, the Mahindra group is active in 100 countries with a range of products and services, which includes vehicles, farm equipment, defence technologies and energy provision.

It reported an annual turnover of $19 billion in the most recent financial year and employs over 200 000 people. Mahindra is, among other things, the world’s largest manufacturer of tractors.