The Mahindra-Kinetic Joint Venture: Mahindra & Mahindra's Foray into the Two Wheeler Market | Business Strategy Case Studies

Details

Case Code : CLBS067
Publication date : 2009
Subject : Business Strategy
Industry : Automotive
Length : 03 Pages
Price : Rs. 100

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Key words:

Joint venture, technological partnerships, acquisitions, two wheeler market, scooter segment, Mahindra & Mahindra, M&M, Kinetic, KMCL, India

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

Abstract:

On July 31, 2008, Mahindra & Mahindra, one of India’s leading automotive companies in India, entered the two-wheeler market by acquiring the two-wheeler business of Kinetic Motors Co. Ltd. (KMCL). Subsequently a joint venture, Mahindra Kinetic Scooters and Motorcycles Ltd, was formed with M&M and KMCL holding stakes of 80% and 20% respectively. In early 2009, the JV was evaluating all options including technological partnerships as well as acquisitions to bolster its presence in the two-wheeler segment

Issues:

» Joint venture
» Acquisition
» Two-wheeler market

Introduction

In January 2009, it was reported that Mahindra Two-Wheelers Pvt. Ltd. (Mahindra Kinetic) was ready to launch a revamped version of the 'Kinetic' range of scooters, the Kinetic Flyte 125 and Nova 135 scooters. These versions were to be co-branded as 'Mahindra-Kinetic' and offered to customers at the same price as their earlier version. Industry observers felt that the joint venture (JV) company would go all out in its endeavor to increase its market share in the Indian two-wheeler market...

Questions for Discussion:

1. Critically analyze the rationale behind the Mahindra-Kinetic joint venture.

2. Is M&M's decision to enter the two-wheeler market a prudent one? Give reasons to support your answer.

3. Having decided to build up a major presence in the two-wheeler market, what future strategy should Mahindra-Kinetic adopt?

The Mahindra-Kinetic Joint Venture: Mahindra & Mahindra's Foray into the Two Wheeler Market*