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About Mahindra Spares Business Unit
Organization Description

It was a strategic initiative, keeping in mind the huge potential of after market spares. This was done by synergising sourcing, inbound logistics and retail marketing operations of both the sectors i.e. Automotive & Farm Equipment Sector. The underlying objective was to consolidate and harmonise the operations to drive the benefits of 'Critical Mass'. Looking towards the need of warehousing & catering Genuine Spares to vehicle & tractor park available in the open market during use & repair work, Mahindra & Mahindra Ltd. developed a special vertical which is currently known as Spares Business Unit. Spares Business Unit (SBU) is a part of Automotive & Farm Sector and caters to Genuine Spares parts requirement of Mahindra vehicles as well as Tractors in use by customers to provide them with the best and genuine spares through capabilities in sourcing, assembling, warehousing and distribution. SBU supplies to the market through it’s own channel network, whom we consider our valued customers. To cater this market a separate department named as ‘Bazaar Sales’ is developed which is taking care of all the distribution related activities. Currently this network is of apprx. 95+ distributors across India catering more than 14,000 retailers in the market.

Foundation

We are many companies united by a common purpose—to enable people to Rise. We operate in the key industries that drive economic growth, enjoying a leadership position in utility vehicles, information technology, tractors, and vacation ownership. We have a growing presence in the automotive industry, aerospace, aftermarket, components, consulting services, defense, energy, financial services, logistics, real estate, retail, and two wheelers. A US $16.2 billion multinational group based in Mumbai, India, we are more than 155,000 people in over 100 countries. One amongst all key initiatives to drive a positive change to RISE, Spares Business Unit (SBU) was established in August 2002 to provide Mahindra customers the best possible and quicker solutions to their Spare Parts needs through our abilities in sourcing, warehousing and distribution. Main aim was to focus on the vast untapped potential in the after-market space for Genuine spares supply. This was previously known as Mahindra spares business operating under Aftermarket Sector. This massive structural change was also expected to bring direct focus on the business potential of the vital operation in terms of turnover and profit of spare part business in automotive & tractor segments. The formation of SBU has resulted in excellent growth not just in dealer business but also in the bazaar business. It has also helped improve customer satisfaction through increased availability of genuine spare parts in the market even in remote areas and even for vehicles beyond new vehicle warranty period. As a part of business expansion, Mahindra Renault Spare Parts Operations (MADL) was annexed with SBU in 2006 to support Logan / VERITO Customers. SBU now Exports to Mahindra USA and other countries. The initial success of the SBU has encouraged the Group management to entrust SBU with spares operation of new businesses like Mahindra Trucks & Buses Ltd., Mahindra Two wheeler, Mahindra Construction in recent past.

Industry Background

Spare part requirements of the vehicle as well as tractor users in India is met by Original Equipment Manufacturers (OEM) their vendors and a large number of other component manufactures who supply materials in branded or non-branded condition. With the advent of new technology in vehicles and desire to have more reliable and durable performance, the vehicle owners have started preferring genuine parts. In after market, more and more organized players are setting up workshops which use genuine spare parts cannibalizing the consumption of spurious parts which are generally used by the road-side garages. In addition, insurance companies are aligning to provide cashless facility through these Service Stations. Impact of GST (General Sales Tax) leading to uniform landing cost will further help the business to grow favourably in the country.


Business Model

The SBU’s business model comprises of highly synergistic interaction with various sectors which manufacture and market vehicles, channel partners, supplier of spare parts and service providers for the warehouse operations and logistics. SBU model has evolved to help sectors meeting long term business plans and effectively service the customer while maintaining the growth and profitability focus of Genuine Spares business. SBU takes responsibility for sales price of product and maximize revenue and profit through efficient warehouse management. It is also accountable for supply for right material at the right time in right quantity. SBU has outsourced warehouse operations and inbound and outbound logistics while ensuring smooth order fulfilment. Besides meeting the sector requirement of supplying materials to the dealers and authorized service canters SBU has been able to develop a new channel called Bazaar to serve out of warranty vehicles thru distributors and retailers which has helped to increase market share.

Products and Services

SBU supplies entire range of Genuine Spares for M & M vehicles & tractors in domestic and overseas markets. The product range is maintained and supplied in the market not just for profitability but also for supporting vehicles on road as per the commitment of sectors to end users.

The basic classification of Spare Parts is based on vehicle categories which are as follows:

  • Tractor (FES)
  • Utility Vehicles (UV)
  • SUVs like Scorpio, Xylo
  • Light, Medium & Heavy Commercial Vehicles (MNAL)
  • Bottom of Pyramid (BOP) Products like GIO, Alfa, Champion and Maxximo
  • Two Wheeler (MTWL)

The product categories based on source supply are as follows:

  • Manufactured parts – 14 % by value
  • Bought out parts - 86 % by value

SBU deals in Spare Parts which are supplied in following forms:

  • Kit
  • Aggregate
  • Child parts

The spare parts supplied in the market in kit and aggregate form attracts less competition and provides convenience to end users. Over a period, SBU has introduced 315 kits in the market which contributes to 10 % of SBU turnover. Three % of sales turnover comes from sale of aggregates.

Core Customer Value Proposition

Customers prefer Mahindra Genuine parts because of perceived

  • Trust
    • SBU Procures Mahindra range of Spares Parts only from the approved supplier base and its own plants
    • Mahindra Genuine Parts are same as those used in ‘My’ vehicle / Tractor manufacturing
  • Reliability
    • Mahindra Genuine Parts meet performance and fitment guarantee
    • Mahindra Genuine Parts are available to customers through their exclusive channel network of authorized Dealers, Service Centers and Distributors
  • Convenience
    • Mahindra ranges of Spare Parts are available through nationwide distribution network & CFA facilities.
    • SBU provides solution to various customer service requirements (e.g. Kits, Aggregates etc.) than just parts.
    • Availability of full range at one counter.

Competitive advantages
SBU has tremendous advantage over other suppliers of parts for Mahindra vehicles because of following reasons:

  • Brand Mahindra (Reliable OEM Brand)
  • Sourcing of parts from OEM Suppliers
  • Established Channel Network
  • Complete Product Range

Unique selling proposition
Competitive advantages mentioned above are also unique selling proposition for our customers. "Shaan se becho, sakoon se kharido", which means "Sell with pride and buy peace of mind". Because M&M Genuine spares are supplied by the manufacturer itself, who has manufactured ‘My’ vehicle / Tractor.

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