Mahindra War Room 2014 AFS Two Wheeler Caselet

Broadvision Perspectives Client Confidential Page 1 of 2

MAHINDRA 2WHEELERS SECTOR
SCOOTERS BUSINESS CASELET

Mahindra Two Wheelers Limited (MTWL) is into the business of Developing,
Manufacturing and Selling of Two Wheelers. This caselet pertains to the Scooters
segment of the business.

BUSINESS BACKGROUND

Mahindra 2Wheelers was created with the inorganic acquisition of the once popular
Kinetic Motor Company Limited (KMCL) to enter the highly competitive Indian 2wheeler
market with a range of class defining scooters. Mahindra 2Wheelers partners with some
of the worlds leading specialists in two wheelers to give the best in quality and
innovation. Mahindra 2Wheelers entered the market in early 2009 with Flyte, followed
by the launch of 2 new models, Rodeo and Duro, in late 2009. With improvements in the
product and a new look, Duro was launched as Duro DZ in 2012. Duro DZ reported
strong initial sales volume and is a star performer in the Mahindra 2Wheelers Portfolio.
Rodeo too was re-launched as Rodeo RZ, with stylish, youthful looks and hi-tech
features, in mid-2012. Rodeo RZ is still the only scooter in India with features such as
the fully Digital Dashboard and front fuelling. In 2013, Mahindra entered the Motorcycle
segment with the Centuro, and plans to dominate the scooter market too with strategic
launches catering different segments.

LIVE CHALLENGE: SCOOTERS BUSINESS STRATEGY

The Scooter category dynamics have changed drastically in the last couple of years.
Formerly viewed as a family or feminine product, Scooters have now become more
acceptable to young males, owing to rapid urbanization, ease of riding gearless
vehicles, better fuel economy and changes in styling. The Scooter category has seen a
plethora of recent launches, as well as the entry of iconic international players such as
Vespa and Yamaha entering the Indian Scooter market. There have been more than 9
new launches, with focus on expansion and high investments by all competitors.
Scooter sales have grown 25% over the last 2 years, compared to the near stagnant4%
growth in Motorcycles. This trend is expected to continue in the coming years. The
competitive intensity in the 2Wheeler industry has increased greatly too, with faster
refreshes, new launches, loud campaigns, localized activations and aggressive offers
and discounts.

This year, the scooter industry has grown 35% so far, with monthly volumes of around
3.5 lac units. In spite of new launches, Activa has maintained its market leader position
with a market share of 45% with strong month-on-month growth. Activa has maintained
market leadership of the Scooter industry for around a decade now.






Mahindra War Room 2014 AFS Two Wheeler Caselet
Broadvision Perspectives Client Confidential Page 2 of 2



Mahindra, being a relatively new entrant in a space dominated by known international
players, needs to strategically define its position in the market place. The following are a
few challenges faced by the Mahindra Scooters range:

Lower awareness of Mahindras presence in 2 Wheeler sector
Perception as a new player and hence need to build credibility & confidence
Market dominated by well established players like Honda, Hero, TVS & Suzuki

Although the aforementioned are the challenges faced by Mahindra Scooters, the
perception of Brand Mahindra is very strong, providing the opportunity. To gain a
significant market share, Mahindra would need to inevitably capture share from the
market leader and come up with innovative plans to establish a strong hold in key
markets. To shake the dominance of a market leader requires differentiated, innovative
and clutter-breaking strategies. The dominance needs to be broken state-wise and
hence one size fits all strategy may not work. Targeted and focused plan to challenge
the market leader needs to be chalked out state-wise.

With this backdrop, please develop a comprehensive strategy to challenge the
dominance of the market leader with Mahindra Scooters by focusing on the key
states of India, which are strong scooter markets. Provide actionable localized
strategies in Marketing, Sales and Customer experience, assuming a budget of
INR. 1000/- per vehicle, keeping in mind that Mahindra 2Wheelers is the
challenger brand taking on a dominant player.