Mr. Alan Durante: “Creating Winning Brands against All Odds”
As a part of “Ribandar Talks – A lecture series by eminent personalities” (a student driven initiative), Goa Institute of Management organized a talk by Mr. Alan Durante (Executive Director and President, Auto Sector, Mahindra & Mahindra)
The launch of “Mahindra Scorpio”
“Innovation” is the way to sustain competition, the mantra behind the making of Scorpio-‘Because nothing else will do’.
Mr. Durante believes that the reason for the phenomenal success of brand Scorpio was ‘customer satisfaction’ which was central to all decisions taken during the product development stage.A customer survey was conducted which proved that customers were looking for a vehicle which would address their present problems like noise, individual suspension, power steering, etc. in a SUV. Eliminating these problems from the new product made it a very comfortable vehicle to drive.
The above lead to “Project Scorpio”-A 600 crores project involving 120 engineers and development over a period of 4.5 years. The project cost of 600 crores was almost one-fourth of the cost any multinational would have taken to develop the product. This cost-effectiveness was achieved by a series of innovative decisions and relentless push on cost.
This project saw a 100% supplier involvement right from concept development to implementation. The company allowed suppliers freedom to leverage on their design capabilities and development expertise. The suppliers thus used a lot of their past experience and designs that allowed to develop a product without a lot of non-conformity.
Cost was also minimized by using existent components that were already in development. They adopted the target costing concept in which the target costs were based on market driven pricing. Gateway reviews were conducted every 15 days to review the progress of the project. And the next budget was allocated only after this review was satisfactory. Though this led to an increase in the development period by one year, they were able to keep a check on the costs without compromising on product quality.
By managing the costs Mahindra and Mahindra was able to price its vehicle at around 5 lakhs. Prior to this there was no SUV in the market which was as comfortable, as easy for city driving and having imagery comparable to international brands, and all these at a price which the masses could afford.
These product features led to the Scorpio winning a number of coveted awards like 2003 car of the year award by BBC, Car of the year award by CNBC, etc.
A few years back the manufacturing industry in India was considered to be dead, all Indian manufacturing needs were imported , but now due to the achievements of the Indian companies like Mahindra and Mahindra, India is back in the lime light as a manufacturing hub, growing at a fast pace.