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Rediff.com  » Business » M&M seeks beachhead in east Europe

M&M seeks beachhead in east Europe

October 08, 2003 08:33 IST

Mahindra and Mahindra (M&M) is scouting for a facility in eastern Europe to assemble the Scorpio.

It is also trying to get a toehold in the lucrative western European markets through a strategic alliance with an Italian company.

M&M has entered into strategic supply and technology alliance with Eurasia Motors of Italy, which will assemble the Scorpio and the Bolero using semi-knocked down (SKD) kits in a facility located outside Rome.

The first batch of assembled Scorpios and Boleros is to roll out of Rome by December this year.

M&M, which is targeting Italy, Spain and France through this alliance, is hoping to sell 3,000 vehicles in its first year of operations, senior M&M executives said.

The M&M cars from the Eurasia facility will be fitted with the latest Peugeot engines to meet Euro III environment norms.

M&M is also raring to go where no other Indian auto company has set foot before -- eastern Europe.

M&M, which already operates a manufacturing unit in Georgia for its Bolero range of vehicles, is now looking at other countries in eastern Europe to launch its Scorpio there.

"We don't have the ability to assemble the Scorpio at our existing plant in Georgia and the local government, which is a majority stakeholder in our plant there, will take some time to approve our plans for upgrading our facility there. So, in the meantime, we are aggressively exploring opportunities in Turkey and some CIS countries for assembling the Scorpio. We hope we can start tapping this market in the next six months," Pravin Shah, vice president, international business, Mahindra and Mahindra, told Business Standard.

M&M currently sells the Scorpio only in Armenia, but these vehicles are imported from India as completely built units (CBUs).

Once the company sets up base there, it expects to sell 1,000-1,500 of the SUV in the eastern European market in the first year.

M&M has been riding high on the success of the Scorpio. The company now holds a 43 per cent market share in the total utility vehicle (UV) segment in the country.

M&M's UV sales grew 185 per cent in the April-August 2003 period, compared with the corresponding period of the previous year.

Continental shift

  • M&M has tied up with Eurasia Motors of Italy to assemble the Scorpio and the Bolero.
  • The first batch of assembled Scorpios and Boleros will roll out of Rome by December.
  • M&M is also looking at countries in eastern Europe, other than Georgia, to launch the Scorpio.
Parvathy Ullatil in Mumbai