In FY12 Mahindra’s UV market share was at its peak at 55%, but by FY19, it almost halved to 24-25%. The auto-to-tractor conglomerate giant has now put together a strategy to strengthen decision making with regard to its product development plan and roped in consultancy firm BCG to work on Project Simplicity, and over the past couple of months, the company had started implementing crucial strategic recommendations given by BCG.
Mahindra as an organisation has too many businesses and initiatives, and there is a criticism that it needs to narrow down its focus on select ones. According to sources, the intent of Project Simplicity is to make the organisation more agile at a time when new entrants, including existing players, are running Mahindra hard in the UV space. Mahindra had been quite busy rolling out new UVs - KUV, TUV, XUV 300, Marazzo and Alturas – in recent years.
The last three launches - XUV300, Alturas and Marazzo - which the company hoped would give them incremental volumes of 8,000 to 9,000 units per month, are today not even bringing half those numbers. A source close to the development told ET that the company needs blockbuster products that would capture the current market sentiment - right product at the right time in the right segment. An ex-official, on the condition of anonymity, said the intent of the company is to speed up change as too many initiatives have resulted in slowing down decision making. The organisation needs to be a leaner, he stressed.
Insiders also pointed out the company’s move to initiate a spare parts rationalisation project in 2010 with BCG which had successfully reduced time, enabling components to reach suppliers and dealers faster besides cutting inventory time. Sources maintained that all these changes are being implemented at an operational level and have nothing to do with the current top management restructuring that is under way.
For instance, an executive said if there was a senior manager in maintenance and a manager reporting to him and six maintenance engineers were reporting to the manager, the manager’s role has now been done away with. Many positions have been trimmed and fixed in other roles within the organisation. Mahindra & Mahindra and BCG declined to comment on the story till press-time.
Analysts said Mahindra has to get up to speed and this initiative is towards that end. This slew of changes is being moderated to ensure that employee morale is maintained. While these initiatives do not necessarily translate into direct job losses, it definitely reduces positions, they said.
"Such projects are needed. It is better late than never. as otherwise, it can make companies cumbersome and inefficient. "Structures, processes, decisions, rights, leadership practices and culture are all elements that must get addressed. Eventually, simplicity is a rare mindset with most corporations,” said Prabir Jha, HR veteran and the CEO of Prabir Jha People Advisory.
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1 Comment on this Story
Bharat337 days ago
Mahindra has actually lost the base market of the door less (Jeep called in the earlier days), Commander & the bolero. Today’s Boleros are delicate and maintenance becoming very high the customers are looking for alternates. The selection of service providers by most of the automobile manufacturers is poor and one of the reasons for customers switching loyalties