How is Mahindra doing in Chennai

sharesThe Indian economic miracle

"We are facing a revolution"

Can India oust China as a manufacturing country for mass-produced goods in the future?

Labor costs in China are rising, making India more competitive. A country our size can produce large series if we create the conditions for it. Mahindra does this in its world cities like in Chennai. Several car manufacturers such as BMW and Renault have already settled there and use the infrastructure we have made available. But if India tries today to copy the model that made China great 25 years ago, then we are doomed to failure.

Why?

We are facing a revolution that will totally change the way we think about manufacturing. Inexpensive large-scale production in huge factory complexes will give way to widely dispersed manufacturing. This decentralization is made possible by new technologies such as 3D printing. Every backyard workshop will be able to download the product design from the Internet and participate. Thousands of medium-sized companies will emerge, just like the medium-sized companies in Germany once did. That will change the migration pattern - fortunately, because most Indian cities will soon no longer be able to grow.

There are western manufacturers such as Claas who are reverse engineering their hi-tech products in India in order to then produce them for the local market. What do you think of the concept of reverse innovation?

If Claas is successful with this, then the concept also makes sense. As a manufacturer of agricultural machinery, we are pursuing a two-brand strategy in India: under the Swaraj brand, we sell simple but very robust products that are reduced to the bare essentials. With the Mahindra house brand, on the other hand, we set the tone technologically. Our new tractor is more advanced than the competition from John Deere. We are the market leader, so we have to set the standards for the future, and the brand's image also depends on it.

Mahindra is the largest tractor manufacturer in the world. Which markets are particularly important to you?

In the United States we have five plants that make $ 500 million a year in sales and we're number three in small tractors by sales. Tractors built by Mitsubishi in Japan and Moolsan in Korea are also sold under our brand. The two companies have not previously managed to get a foothold in the US market on their own. All models are equipped with our engines, which are cheaper and better than their own. This is the new global world.