Mahindra Ssangyong Rexton: The first product and first acquisition

Mahindra and Mahindra launched the Rexton, under the Ssangyong umbrella on 17th October and critics have had a lot to say about the synergy and strategy. Mahindra & Mahindra has been quite optimistic about it, since the talks of acquisition began back in 2010 until this date when it has rolled out the first product off the joint cart.

The first product: Ssangyong Rexton by Mahindra and Mahindra

The Rexton is a premium SUV which is based on the Mercedes M Class platform and yes if you haven’t got the point, let me put it across in straight words, it is a bang for buck and it will give cold shivers to our SUV heros- the Fortuner, Pajero and Endeavor. The chrome grill upfront flanked by peeled back headlamps, leading into flared wheel arches, it is a definite style statement and add to the solidity of the SUV, the status symbol is well preserved. The Merc DNA gives it curves at the right places with smartly sectioned windows and quarter glass, highlighting the length of the car.

The interior is a bag of surprise, I would rate it ever better than the segment leader, Fortuner, thanks to all that it has to offer- the touchscreen, DVD Blayer, Bluetooth, rear parking sensors. Adding to the plush elements of the car are extremely solid, cockpit like steering mounted controls. I normally look at all the controls up there and go, that’s a lot! That’ll take me ages to get used to but honestly there’s so much to flaunt inside that I would not mind.

The Rexton houses a 2.7 L 5 cylinder DOHC turbo charged diesel motor mated to a five speed manual and automatic gearboxes, the former is able to do a 162 bhp, the later goes higher at 184 bhp. Just like the Fortuner, the Rexton automatic is an all time AWD.

The synergy between the two brands will in a big way decide how well this product is received by the market, in the first phase M&M would sell it through its own dealership with an independent sales folk to cater to its expensive cousin and after having gauged the initial response to the product, M&M will move towards independent dealers for Ssangyong.

The first acquisition- Mahindra & Mahindra and Ssangyong

When two people are arranged to marry, its all very strategic with almost a checklist in hand, you consider a few more options and weigh the pros and cons before you zero on a suitable match. Similarly in business acquisitions, it is all very strategic and a lot of thought process goes into conducting due diligence.

M&M played right with the timing strategy, this was indeed the right time to launch Rexton, since it has established itself as a ‘sort of’ premium player, the XUV 5oo gave it the right push. It was a significant leap for M&M and complimented its portfolio well and it was needed, M&M could not have thrived on the cheap Thar, the boxy Bolero, the old Scorpio, the rusty Logan/Verito  to climb up the price value ladder. The XUV 5oo with a relatively higher price tag and an extremely expressive styling language made way for the Giorgietto Giugiaro styled- the premium Rexton.

Back in 2008, Tata Motors had acquired Jaguar which critics described as an expensive mistake only to have their mouths shut when Tata Motors turned around the fortune of the disowned child of Ford Motors. Incidentally Mahindra & Mahindra were too in the race to acquire the British marquee but had opted out of it, however since they believed in positive impacts of acquisitions,  they had been on a lookout for a better match for them. Sssangyong just proved to be the point where search for one ended- Ssangyong’s got the right portfolio, one that primarily consists of SUVs, very similar to M&M’s and couple that with Ssangyong SUVs’ 4X4 capabilities and you know this is resonating with M&M’s brand positioning.

The acquisitions and mergers can be risky propositions, they could help a sinking brand stay afloat or a cause a successful brand to sink. While some players of the developed world grew too big  to sustain in their thirst for global acquisitions, for example Ford Motors had to get rid of its major brands like JLR and Volvo (which was acquired by Geely in China), GM and Chrysler had grown so massive in size that they had to file for government protected bankruptcy, the emerging markets continue to give a high to automobile manufacturers.

It will be interesting to see though how this acquisition will work,  if M&M will go the Tata-JLR way where Tata Motors has retained JLR’s Britain based R&D and also continued some projects (like Evoque) which were started by the old master Ford or aim at bringing Ssangyong’s R&D facility to the home ground as per the Automotive Mission Plan (2006). All eyes on you  M&M!