Mahindra Tractors in the United States
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Case Code: BSTR298 Case Length: 14 Pages Period: 1994-2008 Pub Date: 2008 Teaching Note: Not Available |
Price: Rs.300 Organization: Mahindra & Mahindra Industry: Auto and Ancillaries Countries: United States Themes: International Business, Entry and Expansion Strategies |
Abstract Case Intro 1 Case Intro 2 Excerpts
"Anyone who owns several acres -from a country homeowner to a school district -may need a small tractor to mow the grass and do other yardwork. The Mahindra Group wants to leverage that broad market to become the world's largest-selling tractor brand by next year."
- Ashok Sharma, Senior Vice President of Strategic Planning and Business Excellence for Mahindra & Mahindra's Farm Equipment Sector, in May 2008.
"[The Mahindra 5500] is by far the best for the money. It has more power and heavier steel. When you lock it into four-wheel drive, you can move 3,000 pounds like nothing. That thing's an animal."
- Jami Lucenberg, Resident of Southern Mississippi, the US, in 2006.
Introduction
In mid-2008, Mahindra USA (MUSA), the US subsidiary of Mahindra & Mahindra Ltd. (M&M), a major India-based automobile company, was rated highest in overall satisfaction amongst tractor manufacturers in the US, according to a survey conducted by the North American Equipment Dealers Association (NAEDA). The survey involved 1,309 dealers and was based on 36 criteria. "The US is a very important market for M&M's Farm Equipment Sector, and to top NAEDA's survey in overall satisfaction is a great honor,"said Anjanikumar Choudhari, Chairman, MUSA.
MUSA, a division under M&M's Farm and Equipment Sector (FES), was founded in 1994. (M&M's FES is the leader in the Indian tractor market). Initially, MUSA imported tractors from India. Later, it started assembling them from complete knock down (CKD)5 kits (imported from India), at its assembly plant in Tomball, Texas, while also continuing to import fully built tractors. The company also entered into agreements with leading tractor companies in China and Korea to distribute their tractors in the US.
Right from the initial years, MUSA strove to differentiate itself from tractor companies like John Deere6 (Deere) and Case-New Holland Global (CNH Global), who had dominated the tractor market in the US since the early 1900s. MUSA launched tractors in the compact tractor segment -a segment that was overlooked by the established players. The company succeeded in gaining a foothold in the US by the late 1990s, and by the 2000s, it was able to record more than 20 percent annual growth in sales. MUSA's success in the US was attributed to many factors. The company was appreciated for the quality and design of its tractors as well as for its competitive prices. Its efficient dealer and customer service system were crucial in gaining the trust of US customers. With regular introduction of new products, the company was able to increase its market share from 5 percent in 1999 to around 10 percent in 2004...
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