Business - M&M slots Rs 300 cr for brand promotion in US

Swaraj Baggonkar

India's biggest utility vehicle player Mahindra & Mahindra (M&M) will spend close to Rs 300 crore ($60 million) towards brand-building and promotion as it prepares to launch its vehicles in the largest automotive market in the world - the United States.

M&M's much-publicised debut in the US market will consist of diesel-driven sports utility vehicles. The company will also sell pick-ups, with four-door and two-door variants. The company has also expressed hope of launching hybrids.

According to sources in the industry, the company has roped in global advertising agency StrawberryFrog to handle strategy and creative duties for the launch. M&M will be the first Indian company to launch passenger vehicles on US soil.

The ad agency has been reportedly assigned to create a global brand image of the company. The senior management at M&M and the special team created by the company in the US to overlook the operations is yet to finalise on the overall brand strategy. However, the team reportedly has reached the final stages in this regard.

When contacted, Pawan Goenka, president (automotive sector), M&M, said, "We will have investment plans regarding promotion and advertising for the US market like we have had for other markets. We have not made the details of these plans public yet."

The Mumbai-based company is planning its US rollout in the early part of the next calendar year, though details were not available. M&M currently sells medium to high powered tractors in American market.

In an effort to its boost image as a company focussing on fuel efficient vehicles, M&M has decided to introduce vehicles, which will deliver superior mileage without compromising on performance or power.

According to Goenka, M&M vehicles will deliver more than 30 miles per gallon (mpg) or more than 12 km to a litre, as the minimum requirement is about 27 mpg as directed by the local rules. All auto makers have to meet the mileage targets even while adhering to stringent emission control norms.

The company will launch its products through an in-place 325-strong dealer network spread across 50 states of Alpharetta-based car importer Global Vehicles. The US is the largest automobile market in the world with annual sales of 13 million units.

M&M's entry into the US market will be at a time when people are shifting to small and fuel-efficient cars. In addition, due to tighter monetary restrictions imposed by the Federal Reserve Bank, consumers are finding it difficult to access loans, to gauge at the progress made by it in areas like emission, fuel efficiency and brand promotion.

Matters such as emission control becomes a little complicated in the US market as opposed to other similar developed markets of the west like Europe, as different states have different emission norms. According to senior company officials, the company claims to have made 'remarkable progress' in meeting emission requirements.

The US is the largest automobile market in the world with annual sales of 13 million units. M&M's entry into the US market will be at a time when people are shifting to small and fuel-efficient cars. In addition, due to tighter monetary restrictions imposed by the Federal Reserve Bank, consumers are finding it difficult to access loans.