Mahindra War Room 2015

AFS - Powertrains Caselet

MAHINDRA AUTOMOTIVE & FARM SECTORS:

POWERTRAINS BUSINESS CASELET
Mahindra Automotive & Farm Equipment Sectors (AFS) consist of businesses ranging
from Automotive (including Cars, UVs, Trucks and Buses), Farm Equipment (including
Tractors), Agri-business (including Seeds, Crop Care and Applitrac equipments),
Construction Equipment and Powertrains (Engines, Transmissions & Gensets). This
caselet pertains to the Powertrains Business, and is independent of other caselets
pertaining to Automotive, Trucks, Farm Equipment and Agri-business.
BUSINESS BACKGROUND
Mahindra Powertrain Divison was created to unlock the value of in-house Powertrain
development and manufacturing capabilities, and consists of the Powerol business,
Swaraj Engine business and the Mahindra Heavy engines business,

supported by

Powertrain Technology Centre and Advanced Engineering facilities at the Mahindra

Research Valley and manufacturing facilities.
Mahindra has a wide range of diesel and gasoline engines starting from 0.6 litres to 7.2
litres and Powertrains up to 400 N-m torque output. Way back in 2002, Mahindra started
selling engines for Diesel Generators, to fulfill Indian customers need for a reliable
power source. This business originally started as a strategy to increase utilisation of the
engine plantS, during a period of slowdown. But the outstanding customer response to
Mahindras gensets, prompted them to create the Powerol brand of Diesel Generator
sets. Powerols major revenue streams are Powergen engines & gensets (70%),
Service and spares (24%), engines for industrial applications (3%) and Telecom energy
solutions (3%). Though Powerol is among the Top 3 in the Indian diesel genset industry
by volume, its product range is limited to 200 kVA and almost 80% of its sales come
from gensets of 62.5 kVA or smaller. This is in contrast to Industry Leader Cummins and
Kirloskar, whose gensets have a range of up to 3000 kVA.
While forming the Powertrain Division, Mahindra benchmarked with global Powertrain
OEMs such as Cummins and Fiat Powertrains. Cummins is strong in Engine
Technology, with forward and backward integration across the globe. Fiat Powertrains,
on the other hand, has developed supplier relationships with many Auto OEMs for
supply of engines and transmissions, gaining 41% of its revenues from non-captive
customers outside of the Fiat/CNH Group.

Broadvision Perspectives Client Confidential

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Mahindra War Room 2015

AFS - Powertrains Caselet

LIVE CHALLENGE: POWERTRAINS 2020 BUSINESS STRATEGY

The Powertrain Division has current revenues of USD. 156 million (about INR. 1000
crores) during FY15, and has aspirations to achieve external revenue of USD. 1 Billion
by FY21. The Powertrains Division is open to all opportunities in both the domestic and
the international markets, across product categories of Gensets, Engines and
Transmissions, as well as inorganic growth through acquisitions of large or small
players.
What should be the key building blocks on which the Powertrain Division can focus on,
to realise this challenging, but inspiring aspiration? How can Powerol grow its existing
domestic business? Is there an opportunity for Mahindra to grow in the Industrial
Engines business from the current level? Is there an opportunity to follow Mahindra
Automotive & Farm Sectors global footprint for growth? Is there a global opportunity for
Engines & Transmissions among non-captive customers in BRICS, Europe and South
East Asia? Are there any potential targets for acquisitions in Engines, Genset OEMs
and Tractor OEMs? Should Powertrain target established players much bigger than its
size for growth, or smaller players who would give entry to new markets and
capabilities?
Based on the above, develop a strategy for the Powertrain division to realize its
aspiration to realise external revenues of USD 1 Billion FY21.

Broadvision Perspectives Client Confidential

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