‘Customers wanted a better driving experience in the Bolero.'

Veejay Ram Nakra, senior vice-president (Sales & Customer Care), Automotive Sector, Mahindra & Mahindra, on reviving the Bolero brand, marrying the proven mHawk engine with the sturdy Bolero platform, new benefits to Bolero customers and the company’s aggressive rural expansion drive. An interview by Amit Panday.

Can you highlight the new features the Bolero Power+ has received over the existing Bolero models, which are seeing sharply declining sales? How do you plan to revive the brand?

The Bolero has its own equity and strength. We did not find any need to make changes as far as that is concerned. The platform per se is highly durable, reliable, rugged, goes everywhere and the maintenance cost is low. It has a typical DNA of the Mahindra styling. So we believed that we did not need to change any of that.

We all know that Bolero is a very well established brand in retail, government, police, army, paramilitary and other sectors. What we felt is a real opportunity now is that the Bolero needs to evolve in terms of offering a better driving experience. This is highly relevant because the infrastructure is improving in upcountry and rural India, and roads are being paved deeper into the territories.

We realised what better than introducing the mHawk engine, which has again got very high brand equity in use across the Scorpio and XUV models, to the Bolero. The mHawk is a proven engine platform. This is a marriage of the Bolero brand with the mHawk engine, and hence we call it Bolero Power+.

That’s the biggest change. With this, it is not just about power but the vehicle becomes lighter, fuel economy improves and overall drivability and maneuverability have also improved. With the mHawk 70hp engine, the whole experience in terms of noise, vibration, harshness, acceleration and other parameters becomes much better.

The Bolero now becomes an appropriate product for rural and semi-urban India in terms of value proposition. We have worked on the whole package at a fantastic price because firstly it is a BS IV-compliant and we have launched it at a price which is almost Rs 100,000 cheaper than the existing Bolero model.

Did M&M conduct a customer survey while developing the new Bolero Power+ to understand what existing or potential buyers of this vehicle are looking for? How did you conclude that the existing Bolero needs more power output and other much-needed features?

Yes, we did. We have a 900,000-strong customer base for the Bolero. We went and spoke to many of those customers across different categories, different segments and in different parts of the country. The insight that we got was that due to the change that is happening in the rural pockets of India and also improved road conditions, our customers want a better driving experience in the Bolero. Hence, we decided to introduce the mHawk engine into the Bolero.

With the new Bolero Power+ on offer, will the existing Bolero models continue to be sold?

Yes, we will have both the Bolero (existing and new) models available in the market. We will let the consumers decide whether they want to buy the old Bolero variants or the new value proposition. Based on the market dynamics, we will take a call on what we have to do with the Bolero brand going forward.

Importantly, there is also a section (of buyers) in upcountry rural India who need the vehicle for transportation of people and other purposes. For them, we have certain variants of the Bolero, which will continue to be sold in their existing avatar.

Industry data indicates that Bolero sales have sharply declined as much as 50 percent year on year. What kind of sales boost do you think the new Bolero Power+ will provide?

We normally do not comment on our sales estimates. All I can say is that with the value proposition that we bring to the table, we believe that Bolero numbers should go up substantially. The initial response that we have received from the dealer fraternity is that they are extremely bullish about the new Bolero.

How many regional launches are planned for the Bolero Power+?

We are doing 12 regional launches in key markets for us because we know that this is not a product that needs a national launch but has its relevance more in the semi-urban and rural markets.

In Pune district, the Bolero has a market share of 62 percent. How would you segregate Bolero’s best markets across the four regions in India?

The Bolero is a strong brand across the country. There is a higher market share that we typically see in the north, north-west and in the western region. Some parts of eastern region arealso strong for us.

How long did M&M take to develop the new Bolero Power+?

The development time varies for different product platforms. As far as this product is concerned, from the time horizon point of view, I think it took lesser time than the development time involved in a full, grounds-up project. I think it took around 18-24 months to develop the new Bolero Power+.

Since the new Bolero Power+ is also a sub-four-metre vehicle now, what is the impact on its retail price by cutting down in terms of the appropriate taxes?

By and large I think the benefit of moving under the sub-four-metre category is roughly four percent in terms of the savings in excise duty.

Can you detail the free accident insurance that Mahindra will provide to buyers of the new Bolero Power+. Is this exclusively for customers of the new vehicle?

Although as of now it is going to be offered with the Bolero Power+, it is a CRM program, which is called the TopGear Club, and hence is available on a range of personal vehicles. So far it was never available on the Bolero. However, now we have brought this program even on the Bolero. As a result of this, even a Bolero customer in rural India has the benefits that the club brings to the table including the accident cover of Rs 25 lakh for the given period.

What is M&M’s dealership count at present? How is the company looking to penetrate deeper into rural pockets exploring potential markets for vehicles like the Bolero?

We have a total of 1,650 touch points currently. Rural penetration is not about the number of dealerships. Instead, it is about the number of touch- points that a company has. We have a very robust strategy for reaching out to the rural markets in India. The country has around 6,000 tehsils. At M&M, we have selected 3,000 tehsils as our focused tehsils where we have decided to take Mahindra as a brand to those tehsils.

The focused tehsil here means that we will have some form of presence in that area. This could be either having a touch-point or through a local representation of the sales team aptly stationed in those markets to service the potential customers.

That is our strategy of moving deeper into the rural pockets. As we do so, there will be many products from our portfolio that will gain including the Bolero, which is one of our primary models for those markets.

Were there any parameters behind finalising those 3,000 tehsils as potential new rural markets for M&M?

There are various ways to cut the data. We have looked at those tehsils where the population is more than 10,000 as the primary factor. Secondly, we have studied the tractor and two-wheeler markets to study the potential of the respective markets before selecting the final tehsils. This was done to study the economy and crop patterns of those tehsils. We also have a very strong agricultural business. We have a wealth of information and data available internally as an organisation to study and analyze before we take such crucial decisions.

This is also called as the white market strategy – the markets where we have not been to and where we will penetrate into soon. This is done under Mahindra Mitra Program.

When was this program officially launched? Did you run any pilot before launching the Mahindra Mitra Program?

Yes, we have been pilot testing it for more than 8-10 months now and we officially gave the name to this initiative around April-May this year. This rural expansion drive is now branded under Mahindra Mitra Program. As a part of this, we are looking at appointing local mechanics, local technicians, and speaking to the heads of gram panchayats across these tehsils to engage with people under this program.

Under the pilot program, we covered around 800 to 1,000 tehsils. After successful results from that we announced scaling our efforts to up to 3,000 tehsils. We plan to cover all these tehsils over the 12-18 months.

Given the good monsoon, market sentiment is up across the country. What are your expectations from the upcoming festive season?

We know that rural markets are showing the signs of revival; monsoons have been good this year, the government is doing all things right in terms of investing in infrastructure, the projects are taking off, and crop prices are good. As a result of all these factors, there is buoyancy in the market.

The overall impression is that all OEMs are bullish and buoyant as we are stepping into the festive season and the second half (of FY2017) will be better than the first half.