Wednesday, January 29, 2014
By John Andrew
Mahindra to invest Rs. 500 crore in 3 years, says new R&D head Rajan Wadhera
In a bid to bring more focus and turnaround its ailing truck and bus business, Mahindra and MahindraBSE -1.34 % (M&M) has drafted R&D head Rajan Wadhera to take charge of the division. The appointment comes after Pawan Goenka took over a larger portfolio as executive director on the board of M&M, which included heading the utility vehicles and tractor businesses to two-wheelers.
The company needed someone who could oversee the truck and buses more closely, an M&M official said. Thus, Wadhera will have a dual responsibility of running the R&D function and Mahindra Trucks and Buses. So apart from being chief executive, technology, product fevelopment and sourcing, he will also be the director and head of Mahindra Trucks and Buses. Nalin Mehta, MD of Mahindra Trucks and Buses will report into Wadhera. An ex-Eicher Motors official, Wadhera has a fair understanding of the commercial vehicles business. "We are investing Rs 500 crore in this business for the next three years. Any new business takes about 5-7 years to incubate; the current slowdown has probably stretched that a bit. But we are investing in new products and services, once the market bounces back we will gain," said Wadhera.
Post the buyback of stake from Navistar , Mahindra Trucks and Buses announced their plan to merge the Mahindra Trucks & Buses to M&M, the legal process is likely to be completed by the end of this fiscal. Having entered the heavy duty trucks space in 2010, Mahindra Trucks and Buses was expected to pose a significant threat to the country's top two players Tata MotorsBSE -1.24 % and Ashok LeylandBSE -0.91 %, but three years since, the company's volumes has struggled and the entity has been incurring losses year after year. At the end of FY13, the company had an accumulated loss of . 920 crore into its business. Its sales in FY13 declined 13.87% to 11,902 units and in April to December of FY14 sales declined 32.85% to 5,731 units.
"We have the ability to withstand these tough times. We are in this business for a long term. There is a space to increase our market share," Wadhera said. The company would be investing this Rs 500 crore in the next three years for their entry into the intermediate commercial vehicle range of 8-12 tonne, development of new cabs for light commercial vehicle range and foray into the bus market.
Source: Economic Times