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Thursday, May 05, 2005

Mahindra & Mahindra gains toe-hold in SE Asia

Every now and then, I am writing about the car industry - an industry that surely shakes up markets across the globe with companies such as GM losing market share and trying to make up for it by building plants in China, or Nissan, a company that was written off for a long time, but is coming in strongly more and more often. By writing about such different industry, it also shows that Asia Business Consulting is engaged in more than just the tech industry.

Mahindra & Mahindra, or, in short M&M, is a leading Indian car producer, and just like many other companies across the globe (speak: China), looks for expansion to other markets. Different from other companies, and may be a sign of changes, M&M doesn't look at the US for this expansion purposes, and don't forget, that the US is the world's largest car market. Additionally, it also doesn't look to China to expand - reason here might be the accelerating saturation that players in that market already face.

On the contrary, M&M comes to Malaysia - and not Thailand, that normally tends to attract a lot of attention from car manufacturers.

Why Malaysia?
Mahindra Managing Director Anand Mahindra said that "this is an extremely important initiative for us ... it is the gateway to ASEAN." Ahhh - its ASEAN, the trade bloc that might have been forgotten by other car producers. Forgotten may be a harsh word, but if you have limited resources in a company and have to chose between two options, many players go the secure way - the way all others go. Only those that are daring, so to speak, go into a different direction. Malaysia's car industry is growing rapidly again - overall vehicle sales jumped to a record 487,605 units in Malaysia last year, according to industry data.

So yeah, it might make sense to go into the market. I could talk more about the advantages that M&M has, going forward, in their targeted market segment, but this blog entry is already way too long. I hope that at least some of the readers managed to get to the end of it.

(By Asia Business Consulting)