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    Project Scorpio:: The Making of India's First Indigenous Sports Utility Vehicle

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    Jacob Edwards
    M&M launched Project Scorpio to reinvent itself and enter the urban SUV market dominated by competitors. Scorpio helped M&M improve its rural-focused image by appealing to urban buyers with its powerful performance, sleek design, and pride of ownership. M&M was right to position Scorpio as an urban vehicle, as it identified an unmet need and grew to become a preferred SUV through innovative manufacturing and best-in-class quality that gave it an edge over rivals like Telco.

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    Project Scorpio:: The Making of India's First Indigenous Sports Utility Vehicle

    Uploaded by

    Jacob Edwards
    114 views33 pages
    M&M launched Project Scorpio to reinvent itself and enter the urban SUV market dominated by competitors. Scorpio helped M&M improve its rural-focused image by appealing to urban buyers with its powerful performance, sleek design, and pride of ownership. M&M was right to position Scorpio as an urban vehicle, as it identified an unmet need and grew to become a preferred SUV through innovative manufacturing and best-in-class quality that gave it an edge over rivals like Telco.

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    M&M launched Project Scorpio to reinvent itself and enter the urban SUV market dominated by competitors. Scorpio helped M&M improve its rural-focused image by appealing to urban buyers with its powerful performance, sleek design, and pride of ownership. M&M was right to position Scorpio as an urban vehicle, as it identified an unmet need and grew to become a preferred SUV through innovative manufacturing and best-in-class quality that gave it an edge over rivals like Telco.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    114 views33 pages

    Project Scorpio:: The Making of India's First Indigenous Sports Utility Vehicle

    Uploaded by

    Jacob Edwards
    M&M launched Project Scorpio to reinvent itself and enter the urban SUV market dominated by competitors. Scorpio helped M&M improve its rural-focused image by appealing to urban buyers with its powerful performance, sleek design, and pride of ownership. M&M was right to position Scorpio as an urban vehicle, as it identified an unmet need and grew to become a preferred SUV through innovative manufacturing and best-in-class quality that gave it an edge over rivals like Telco.

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    You are on page 1of 33

    Project Scorpio:

    The Making of
    India's First Indigenous Sports Utility
    Vehicle

    Presented By: Group 8

    Background
    M&M was setup in 1945 to manufacture general-purpose utility vehicles.

    Diversified into the manufacture of tractors for agriculture & light


    commercial vehicles (LCVs).

    Diversified into other sectors through JVs.


    M&Ms farm equipment division received many awards & recognition.

    Enjoyed a Monopoly in the Utility Vehicle segment till 1990s until TELCO,
    Toyota entered.
    2

    Why M&M needed to diversify its product line?


    Vehicles like Armada, Pick-up, CL, MaXX started to face the wrath due

    Fierce competition from Telco after launch of Sumo and later from models
    like Sierra, Safari and Qualis.
    Sumo sold 1,00,000 units between 1994-97 while M&M was 26,321 units.
    While Qualis sales were more than 50000 units within 2 years of Launch.
    This immense competition was the cause of M & Ms stagnant sales in year
    2000, listing its share price at all time low of Rs 100.
    3

    The Scorpio Project and its Stages


    Scorpio project was very important as it shed its image as a manufacturer of
    vehicle for rural and break into urban market.
    New world class line were set up by M&M at the plant by suppliers to
    manufacture component.
    Existing facilities were used for other products too in M & M.
    Integrated and design manufacturing (IDAM) was used, which was developed
    with the help of Lucas Engineering.
    IDAM helped them to easier to make what you can sell rather sell what you
    have made.

    Stage I: Pre- Production


    M&M conducted survey of market and customer preference to derive input and
    perception.
    UV market was very small and was used UVs were used by rental and taxi
    service agencies.
    Later 2000 the perception changed with the launch of quails and started buying
    for personal use.

    Stage I: Pre- Production (contd.)


    Indian automobile was divided into four segment and Scorpio positioned
    themselves in luxury segment.

    Scorpion was designed to fall between passenger car and SUV.


    QFD was used to analysed key buying factor.

    Stage II: Supplier Involvement


    One of the few vehicles to be built with complete supplier involvement from

    beginning till the end.


    Identified the best vendors in their fields and collaborated for e.g.
    Bridgestone USA for tyres, Samlip from Korea for suspension, and Renault
    from France for Petrol Engines and AVL from Austria for Diesel Engines.
    Introduction of innovative sourcing system helping M&M in Cost
    Reduction.
    Setting up Supplier's facilities at the companys plant.
    7

    Stage III: Team Scorpio


    A total of 120 people comprised of the team that was involved in handling the
    project, under the leadership of Mr. Pawan Goenka.
    These 120 people had average age of 27 years which gave the freshness and

    experience and also they were divided into 19 multitasking groups.


    The teams were given autonomy and had to take ownership of their own.

    The teams were made responsible for delivering quality at least cost and
    which made possible to the making of Rs. 5.50 Billion, almost 1/5th of
    worldwide expenditures for making SUV project.
    8

    Stage IV: Testing & Validation


    Like very few companies in India, M&M launched Scorpio only after it
    was completely ready, in contrary to launch it first and then fix the flaws,
    although the process of launching the vehicle was delayed.
    Hence, M&M didnt have to recall any of their vehicles.
    STEP (Simultaneous Testing and Examination Process) Test:
    Built 74 vehicles for testing.

    Production Stage:
    Each component and combination was tested vigorously tested to ensure
    that only the best combination of form and function remained.
    NOVA C (New overall vehicle audit-customer) System:
    The complete vehicle was put through the NOVA-C system to measure the
    overall quality of the production process.
    Road worthiness was also tested for 2 years approximately before its
    launch.

    10

    The Launch and After


    Launch of a proud product.

    Preferred SUV in the Indian automobile market.


    Companys income rose by 22% for the fiscal ended March 2003.
    The customers felt a pride of ownership.
    Gave a touch of class to the owners image.
    Aggressive marketing boldened by flawless manufacturing made the
    purchasers happy.
    Some criticisms:
    Doubt in its capability to produce in-house.
    The product was not crash tested.
    11

    Scorpio's Specifications

    QFD Process:

    Customer
    attributes

    Product
    Specifications

    12

    SWOT Analysis
    Strengths
    1. Good performance for long distances
    2. Powerful player in the taxi/rental segment

    3. Good presence in the rural and tier-2 cities segment

    Weakness
    1. Overall vehicle performance not up to competitors
    standards

    2. Low advertising and brand visibility

    4. Maintenance cost is low


    Opportunity

    Threats

    1. Increasing purchasing power and growing target

    1. Competition

    2. Leverage strong brand name by more advertising

    2. Government regulations & increasing fuel prices

    3. Newer innovations

    3. Improvement in public transport


    13

    Product Innovation Charter


    Background
    Key ideas from situation analysis
    Urban market needed a vehicle that looked like an SUV but also had the
    comfort and aesthetic of a passenger car, Scorpio catered that niche
    segment which was neglected earlier.
    Managerial dicta
    Their aim was to develop an innovative and flexible manufacturing
    system which catered to the demands of the customers. They wanted to
    target urban population who thought that M&M produces vehicles which
    are suitable only for rural use.
    14

    Reasons for new PIC


    Increased competition in UV market in 1990s, market share decreased
    rapidly
    Telcos Sumo was much more aesthetic looking than M&Ms UVs which
    made them popular in urban market. M&M did not cater to the urban
    market.
    Sales stagnated by early 2000s and share price touched an all time low of
    Rs. 100

    15

    Focus
    Technological Dimensions
    Product will be available in three variants 2 in Diesel ,1 in Petrol.
    Color variants Red , Blue , Silver, Black.
    Big in size, as size matters , using latest technology .
    Key buying factors to be analyzed using a Quality Functions
    Deployment Process (QFD).To be able to deploy functions forming
    quality, with complete supplier involvement.
    The vehicle have to be cooled from 40 degrees to 27 degrees in 13
    minutes.
    Use of IDAM (Integrated Design & Manufacturing)

    16

    Market Dimensions
    Scorpio would be somewhere between a passenger car and SUV.
    Scorpio would be in C segment of the market (luxurious).
    The approach shall be of a car+, offering benefits of car and thrills of
    an SUV.
    Power of the vehicle shall make a statement.
    Stick to the design of the car through out the developmental phase.
    On par with world class vehicles- Pajero, Landcruiser.

    17

    Goals
    Profit
    To achieve 22% increase in companys total income through the
    product. To increase revenues from the auto sector by 37% (from 18
    billions 25 billions)
    Growth
    To become a preferred SUV in the market. Increase shareholders value.
    Market Status
    Increase market share from 15%- 22% by fiscal year 2004.
    Further increase to double to 49% by fiscal year 2005.
    Ruggedness with comfort and aesthetic appeal.
    18

    Guidelines
    General
    To be launched after complete testing.
    Degree of Innovativeness- New to the Market
    Timing

    Product should be developed in a time period of 5 years.

    19

    Question: 1
    Scorpio was said to be M&Ms attempt to reinvent itself in the Indian

    automobile market. How did Scorpio help M&M improve its image and
    counter competition from giants like Telco and Toyota? Do you think M&M
    was right in departing from its traditional forte and positioning Scorpio as an
    urban UV?

    20

    Scorpio help M&M improve its image and counter competition from
    giants like Telco and Toyota:
    Scorpio turned out to be a winning move by M&M.
    Helped shed its image as a maker of vehicles for rural use.

    Got a foot-hold of the urban market.


    After launch, it gave stiff competition to others.
    Bestowed a pride of ownership and had a powerful appeal, usually lacked by
    its closest competitor like Qualis.

    Used state of the art technology and materials to give a world class product.
    21

    Implementing the concepts of Design:


    Design for Speed to Market

    Use of Cross-functional teams & outsourcing to the


    best suppliers

    Design for Use of Manufacture

    Reduced the manufacturing cost, finishing.

    Design for Differentiation

    Quality, Ruggedness, Reliability, Durability

    Design to meet Customer needs

    They adopted QFD technique to gather the customer


    needs and turned them into product specifications.

    Design to build or support


    Established brand name in UV market
    corporate identity
    Design for the Environment

    Integrated Quality Products with Better Efficiency


    22

    Mahindra and Mahindra was very much on path in positioning Scorpio as


    an urban UV because:
    There was a huge potential in the urban market.
    Scorpio combined ruggedness with comfort.

    Expectations and perceptions of the buyer matched with Scorpio.


    By end of 2004 Scorpio survived the trend of being used as a commercial
    vehicle, but being used primarily as a personal vehicle due to its sleek design
    and impressive interiors.

    23

    Question: 2
    Suppliers played a vital role in the success of Project Scorpio. Describe

    M&Ms supplier strategy for Project Scorpio. How important is it to give


    suppliers autonomy? Also, comment on the rationale behind the formation of
    cross-functional teams for the project.

    24

    Source: Economic Times, Corporate June 17-23, 2012

    25

    Mahindra and Mahindra Supplier Strategy


    Supplier involvement from beginning to end.
    World Best companies were chosen by M&M as suppliers for the project
    of Scorpio.
    Outsourced multiple suppliers.
    Importance of supplier autonomy
    M&M gave autonomy and decentralized the supply system.
    Freedom to do anything as long as it comes in budget constraint.
    Rationale behind the formation of cross-functional teams
    Customer centric.
    Well balanced.
    Faster pace of work.

    26

    Question: 3
    Scorpio proved to be an immense success. What were the reasons for its

    success? Comment on the importance of testing and validation in the


    automobile industry. What were the main criticisms against Scorpio?

    27

    Reasons for success:


    Applying the concept of Product Protocol
    Target market: C Segment of Auto segment in India.
    Product positioning: Intermediary of a Passenger Car & SUV
    Competitive comparison: Looks & Styling, Refinement

    Augmentation dimensions:

    28

    Timing: Launch of the product in highly potential market


    Marketing requirements: Aggressive & Ubiquitous advertising with a

    tagline of Nothing Else will Do


    Financial requirements: Design to Cost, 1/5th of the total global SUV

    expenditure on a similar project.


    Production requirements: Outsourcing from Best in Class

    Corporate strategy requirements: To get a foothold in the Urban Market


    Potholes: No crash test, Doubts in M&Ms capabilities to produced in-house.
    29

    Mahindra Scorpio used by Italy's CNAS

    Source: Wikipedia

    30

    Importance of Testing and Validation


    Testing vehicles and components are important to ensure that only the best

    combination of form and function remained


    Today, simulations provide a highly conclusive basis for configuring

    structures
    But in other domains, like fuel spillage or some of the simulations in crash
    testing, they still dont provide the necessary accuracy
    This is where tremendous importance is still placed on testing, particularly in
    terms of validation for satisfying statutory requirements
    31

    Criticism:
    Few criticism raised were:

    Amount of outsourcing that went in the making of Scorpio


    Collaboration with Foreign companies

    Not Crash Tested


    Despite the shortcomings, Scorpio proved to be a milestone for M&M and the

    Indian automobile industry

    32

    33

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