I've actually lost faith in conventional research for many, many years.
One of the things that we do is the marketing teams don't have the power to say no.
What do you think Tata Motors does better than Honda?
I think they make mass-market vehicles really good, better than us. You know, if you want to create an aspirational brand, then let's not do micro SUVs which look like they have no unmissable presence there, right? Or let's not do an MPV which looks a little clunky.
What would make you conclude that the Mahindra EV strategy was wrong?
I think anything less than 4,000-5,000 a month, we would have been disappointed.
Right. Raj, what are you getting wrong today?
There are very few Indian brands that have managed to change what they mean to consumers without losing what made them relevant in the first place. Mahindra is one of them. For years, Mahindra stood for toughness, utility, and reliability. The Bolero, the Scorpio, the workhorse. And then something changed. The THAR became a lifestyle statement. The XUV700 pushed the brand into a more premium space. Scorpio became an object of aspiration. And now Mahindra is making one of the industry's biggest bets on electric SUVs. So today I want to talk less about the numbers and more about the transformation. How did Mahindra change the meaning of Mahindra? And who better than Rajesh Jejurikar, the CEO of Mahindra and Mahindra, to give us these insights. Welcome to the Brand Equity show, Rajesh. I'm truly excited about this conversation.
I look forward to it too and thanks for having me on the show.
You know, Rajesh, there was a time when people bought Mahindra because they trusted it. Today, increasingly, people want to buy a Mahindra because they desire it. When did you first realize the shift had happened?
Yeah. So, you know, it's been a very interesting transformation story as you call it. And the one facet of the transformation I want to flag off is we haven't lost the core of who we were. Sometimes when we talk about transformation, it means that you're moving from A to B. Right? Here we haven't lost the A. So we still sell a lot of Bolero, we still sell a lot of Scorpio, and we still are very aspirational in rural India. And we've created a whole new equity in urban India.
I think what started happening over time, especially in the last 7, 8, 10 years, is Mahindra salience in urban India started going down. Even when we launched the XUV500, which was in 2011, it was aspirational in urban India, and you know, you still see a lot of those consumers and they did migrate or upgrade to the 700 when we brought that in 2021. But that had kind of started weakening, and the last four or five years has seen a significant step up in our imagery and our aspirational quotient in urban India.
And I think that's the interesting part of the transformation. We'll talk a little bit more about the EVs as you spoke.
But you know, and the EVs have pushed the tech and the image both together, you know, significantly beyond what it was. But I just wanted to reinforce that really what this has been is the rare ability to keep your core intact and still under the same brand name be able to create a whole new consumer set.
But Rajesh, looking at this transformation, was it deliberately engineered or did the product create a brand that surprised you?
No, I think it's a little bit of both, right? Firstly, in the auto space, you can't do a brand transformation without the product living up to it. I mean, it's not about putting out one great campaign or whatever, right? The believability of it is the product. I mean, there's so much that consumers connect by way of the product offering that you can't do a brand transformation without a product transformation. So the product transformation, you know, let's say you spoke about the THAR which we launched in 2020, the new version of the THAR, and then the XUV700 and the Scorpio N, and then of course we had the THAR ROXX and now the EVs. We were very mindful as we were launching them that we wanted to be in mainstream and mainstream urban India as well. The rural market was always a part of our strength and you know, that didn't need any brand work.
You know, interestingly, around 2020, when I was in conversations with some of our dealers, and you know, at that time we had a kind of rural market team, and I remember some dealers telling me, 'Why do you all need a rural market team? You should have an urban market team because we are already in rural and we are strong there. Why do you need a team to manage that? You should focus on urban.' And that was so true. So we kind of had to strengthen our presence in urban, and for that we needed consumers to believe that this was now an urban-ready set of products.
And that was one of the first tasks when we launched the car, which was really to say the product is refined enough now for it to be a mainstream urban product, which means quieter, you know, better ride quality, all the things that urban consumers look for, even if they're going to use the product for off-roading or adventure drives or whatever. But some of these things become essentials to a product offering. Let's talk about THAR for just another minute. Did THAR teach Mahindra how to create desire, or did it reveal a consumer to Mahindra that it previously did not know existed?
So, you know, interestingly, when we were thinking of launching the THAR in 2020, one of the thoughts was we did have a THAR, which we had launched in 2010, which was not as refined, the engine was a little noisy, all of that, not as comfortable. And the thought was, should we launch the new one as a THAR or should we just call it a Mahindra Classic? You know, which was like, okay, this is the flagship of the Mahindra portfolio. And we had a product called Mahindra Classic in the past which was the open top. And we kind of said, should we bring this one as a Mahindra Classic? We did go through that process. And then what we, and I was just coming into my current role at that time, and I was, you know, having this contrarian view that let's do a Classic rather than a THAR. And then the team kind of actually brought a lot of data in to say that there is actually so much anticipation around the new THAR even before we launched it.
Because the old THAR was there, right? Now, the old THAR was very desirable. So the desire was there, but people didn't want it because it didn't have all the creature comforts, as we come to call it, which they expect a mainstream vehicle to have. And I think what we did, to your specific question of what did we learn from THAR? We did learn how to use digital very effectively, right? Because that's what the THAR launch was about. It was, I mean, we spent just 15 crores in the whole launch, all inclusive.
So that's the first change, right? You could see the impact, if the product is good, you could see the impact you could create using a digital strategy. And we didn't go on air in a significant way for at least 8-10 months after launch. So we actually built the whole brand on digital.
Wow. What did THAR teach you about the Indian consumer that possibly conventional research has not?
I've actually lost faith in conventional research for many, many years. I'm a great believer in understanding social context and the insights that come out of that, because that is really what shapes a lot of our decisions and strategy. And you know, the more you research, not that you don't need to research, of course you want to validate a few things or your own hypothesis. So the social context then was this was a country which was wanting to move and get out there, and because a vehicle is such a significant part of status and who you are in society. You want your vehicle to look different. You want people to kind of know you by the vehicle you drive or own, because that in a way represents who you are.
So the THAR played straight into that. And when you come to look at it, you know, that's what we've done with all our other products that have followed, which is the vehicle has to stand for something. And we kind of used two terms apart from the other things that we did in product. One was unmissable presence, so a Mahindra SUV has to have unmissable presence. When you see it on the road, it has to look Mahindra. So we use the term unmissable presence. The other was turn-on design. So everything that we've done followed these two principles. And sometimes our engineers do ask us, are we over-indexed to design? And yes, we are, because we think that's what is differentiating our proposition. And we do trade off a few things because we want design to kind of lead the proposition.
When did you decide that design will stop just being a product attribute and will be a strategic weapon, you know, for the company?
Yeah. I want to respond in two parts. One is in the time of let's say 2015 to 2020, we had a significant upgrade in our engines. So the engines were quieter, more fuel-efficient, truly global class in every sense of the word, reliable, all of that. So that was work which was already done. By 2020, that work was secure, and then the question was, okay, we have some really good engines, but are our products really exciting customers? And that's where the role of design came in. And you know, that was one of the first kind of tasks at least I took upon myself to say we really need to create a world-class design team and capability, and that has to be at the center of our strategy. And it can't be something which is one more department on the sidelines. And then we kind of said we probably need a new, a really good design head. And then we reached out to Pratap Bose, who was operating from the UK at that time. And he kind of said, yeah, took many months of conversation, but he said, 'No, I'm not going to relocate to India anyway, I'm well settled here.' And we said, 'Fine, we'll create a design studio in the UK.' So that is how we've ended up creating a design studio in the UK, and Pratap joined us in 2021. And at that time he kind of said, you know, maybe we'll need, we asked him, you know, okay, design studio, how many people do you need? So he said we can start with 5-10 but maybe go up to 20-25. Now four-five years later we have 65 people in the UK doing only design, and from some of the best marquee brands in the world.
And we've significantly strengthened our Indian design studio as well. So we today have a really strong design team. And that has, in a way, you know, Pratap and the design team have really kind of brought design to the center of it. And a lot of our ideas actually come out from the design team by way of, okay, this is what we need to do, and then we work back.
And sometimes they of course come from strategy, but design does kind of say, yeah, let's do this.
But this must have required some amount of change in terms of culture within the organization. How did you kind of go about that?
Yeah. You know, from you're saying to make design the center. Yeah. So, you know, I'll go back to the attribute definition that I kind of walked you through, right? Six parameters. Two of them are design: turn-on design or head-turning design, whichever way you call it, and unmissable presence. So design has to play a very, very critical role. Once the organization starts saying that this is how we're going to build the brand, and we created something called the brand purpose statement, and the brand purpose statement was about creating a certain kind of vehicles with this definition of the brand, 'Gym and Explore the Impossible.' Then the organization is aligning to stand for something and to create a certain kind of vehicles. Part of that process was to say we'll be an SUV-focused company. So, you know, if you want to create an aspirational brand, then let's not do micro SUVs which look like they have no unmissable presence there, right? Or let's not do an MPV which looks a little clunky. Not that we won't ever do it, but in the way we defined it, we said we have to be creating a certain kind of vehicles: authentic SUVs which are adventure-ready, sophisticated, and sustainable. And have this characteristic which I spoke about on the design and the unmissable presence. Then the organization is understanding that that's a priority, and that is then driving through in all project meetings and the trade-offs become clear.
Right, right. Rajesh, if I asked you to look at who is the Mahindra consumer today, a customer today that was not there 10 years ago?
Yeah, many segments. But I want to talk, you know, use this as a segue to get into the EV conversation.
We've sold now about 75,000 electric vehicles in the last 16-17 months since we launched. They're all at price points ex-showroom starting about 22 lakhs going up to 30 lakhs. This was inconceivable that we would be able to sell 12 to 13% of our portfolio in electric at price points as high as this. We do sell the XUV700 as well at 20, you know, some 70% of the portfolio is 20 lakhs plus, but they're not as new to the Mahindra portfolio as the EV customers are. Most of our EV consumers have come in from luxury brands.
Okay. So, in a way, they're kind of going back to the point of value. They see so much value in what we're bringing in the 20 to 30 lakh that a lot of them have moved, are actually owners of luxury brands today and are now starting to use this as their mainstream product.
