THE LONG-AWAITED TURNAROUND
to Russia. Consequently, the focus on the domestic market increased.
M&M also aspired to introduce premium SUVs from its Korean subsidiary into the Indian market. That was done with much fanfare but it failed to generate enough volumes and the company therefore did not launch the Tivoli in the Indian market. M&M continues to sell the Rexton (under the SsangYong brand) in India but its sales are abysmal: less than one a day. M&M is now developing an SUV for the Indian market on the Tivoli platform.
Moving ahead, M&M will see some challenges in further improving the performance at SsangYong. “There are challenges and opportunities. The main challenge is managing the foreign exchange risk in the current volatile macro-environment, building a distinctive brand and maintaining competitiveness. We have made significant headway in all these SsangYong’s financials since 2011 areas,” states Goenka.
The company has started focusing on new overseas markets such as the UK, Europe and Iran that are now becoming significant contributors to SsangYong’s export volumes.
The turnaround of SsangYong also means that it is now a bigger entity in the M&M fold. During FY12 (the first full year under M&M), SsangYong accounted for 19 per cent of the SUV major’s consolidated revenue. This has now climbed to 24 per cent, even as overall revenue has expanded. SsangYong has also become bigger in its domestic market: it used to have a 12 per cent share in segments where it operates during 2011 and moved up to 17 per cent last year.
In bringing SsangYong to a stronger footing, M&M joins the short list of Indian automotive companies that have managed to acquire under-performing assets overseas and bring efficiency and improvement. The turnaround of Jaguar-Land Rover under Tata Motors is the biggestknown example. Bajaj Auto acquired the loss making Austrian motorcycle maker KTM in 2007. In 2015, KTM globally sold a record 183,170 units and also posted a highest turnover of ^ 1 billion.