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Tired of being a big fish in a big pond, Indian carmaker Mahindra wants to fight the sharks in the ocean. And South Africa could be a key battleground.
The company, which specialises in pickups and SUVs, is a dominant force in these sectors in its domestic market. India is the third-largest new car market in the world, behind China and the US. It overtook Japan in 2022.
But Mahindra’s global presence is limited. Of the 25 countries where it sells outside India, South Africa is the biggest market. Sales growth is remarkable but off a small base. Last year, Mahindra was the fastest-growing automotive brand in South Africa, increasing sales by 78%. In the past five years, they have grown by an average 23.6%.
To put that in perspective, in July the company sold 929 vehicles in South Africa, putting it 12th in the list of top-selling brands.
Here, most demand is for the uniquely styled Bolero and Pik Up bakkies (Mahindra doesn’t use a “c” in “Pik”), but there is also steady demand for SUVs like the Scorpio and XUV300.
To achieve its global growth dream, however, Mahindra recognises it needs a more conventional bakkie — which is why, this week, it showed off the concept version of its proposed Global Pik Up. It was part of a broader announcement of Mahindra’s overall expansion plans, including development of electric vehicles (EVs).
The new bakkie, which will get a proper name before its launch in the next couple of years, is much closer in styling to Japanese, US and European bakkies than its predecessors.
Veejay Nakra, global president of Mahindra’s automotive activities, says this is necessary if the brand is to achieve its international goals.
“To compete in the global pickup sector, we have had to design the new product from the bottom up,” he tells the FM. Chief designer Pratap Bose adds that the new identity will “pave the way for our global acceptance.”
We hope to build in South Africa when we scale up, but we have to look at the value equation
— Rajesh Gupta
Both men, with several other senior Indian executives, were in Cape Town this week for the announcement — a nod to South Africa’s importance to the Mahindra brand.
Mahindra South Africa has an assembly plant in the Dube TradePort industrial development zone next to King Shaka International Airport, north of Durban. There, it reassembles semi-built vehicle kits imported from India — a manufacturing process known as semi-knocked down (SKD).
Local CEO Rajesh Gupta makes no secret of the fact that he’d like to expand the operation. Some within Mahindra support the idea of upgrading the plant from SKD to full-scale vehicle manufacture. Nakra, who headed the South African subsidiary for five years after it was launched in 2004, says the new pickup could make expansion feasible but that it’s too soon to start making plans. Demand will have to justify further investment.
“We hope to build in South Africa when we scale up, but we have to look at the value equation,” he says.
To create local demand, the new Mahindra will go head-to-head with the Toyota Hilux, Ford Ranger and other entrenched local favourites. History shows that South African bakkie owners take a lot of persuasion to switch brands.
There will also have to be market growth across Africa. Mahindra is present in 10 African countries, including Mozambique, where Nakra says it tops bakkie sales. Mahindra South Africa’s marketing responsibilities extend into neighbouring countries and Gupta says there is scope for growth there.
Besides Africa, Nakra says the new vehicle is also targeted at regions like Australasia, South and Central America and Southeast Asia.
So far, the new bakkie concept design has been shown only in double-cab lifestyle form. Nakra says it will also be built as a single-cab “workhorse” for agriculture and industry. Thought is also being given to building a “king-cab” option — a single row of seats with extra storage space behind.
What we’re unlikely to see in South Africa for some time is a Mahindra EV. The company is going headfirst into full battery-electric design and bypassing hybrid-electric vehicles with dual electric and petrol/diesel internal combustion engines (ICE).
Nakra says Mahindra will develop ICE and EV versions of all its vehicles. Given the state of infrastructure in India and the developing-nation status of many of its intended export regions, he says the company can’t afford to abandon ICE technology. Outside India, the UK and EU are likely to be the main EV targets.
It’s no surprise that Mahindra should seek a wider global audience for its vehicles. Given the voracity with which Chinese competitors are seeking foreign sales, one might argue it could have done so earlier. Mahindra, though, says now is the time. According to one executive: “We have proved we can beat the rest of the world in India. Why can’t we do that globally?”
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