Tata, Mahindra’s sibling rivalry set to turn ugly

August 11, Ratan Tata addressing his last Annual General Meeting at Tata Motors

“(I have) a great respect for what Mahindra & Mahindra has been able to do. I have certain degree of sadness and shame that we have let that happen. I think we have a great deal of introspection to do as to why M&M should be ahead of us and us catching up, on the horse-power we have lacked it, but we should have been there and not them. So I hope the spirit of this company will ensure that we undertake every step to get back to the prominent position and not let a competitor do better than us, by being first in everything we do.”

August 12, Anand Mahindra on Twitter

“Mr Tata’s comment is extraordinarily humble and generous,” Anand Mahindra tweeted on Saturday. “M&M takes it as a pat on the back from a big brother and it inspires us to work harder.”

This camaraderie between the heads of two of the largest business conglomerates in India displayed unabashedly above is as heartening as it is a sore exception in the “dog eats dog mantra” of corporate world. In a sector largely driven by high end technological prowess and innovation, Mahindra and Mahindra and Tata Motors have steadfastly held their own among the Hondas, Toyotas, Suzukis and Volkswagens of the world.

And it is no coincidence that the two Bombay based firms have also at times taken the attack to the opposition by daring to diversify and gobble up out of luck companies abroad. Tata’s acquisition of British marquee brands Jaguar Land Rover in 2008 and Mahindra’s takeover of South Korean Ssangyong in 2010 are cases in point. Almost like as Anand Mahindra says, an elder brother showing the way to a younger sibling.

Beneath the surface though, there is intense rivalry building up between the two firms. At stake is the number 3 slot in the passenger vehicle market as well as the tag of the largest indigenous company in the business. Since April this year, Mahindra thanks to the success of XUV5OO, has nudged closer to the Tatas. Thrice in the last six months including last month itself, it has taken a lead over its bigger cousin. The gap between the two firms is now less than 3,000 units.

The launch of the Quanto, M&M’s cheapest and smallest utility vehicle is almost certain to steer it clear of Tata, which has a problem with almost all its products. Saddled with age old brands and sorely lacking novelty, the entire range of Tata cars from the Nano to Indica and Aria, is struggling to find takers. Even the craze for diesel run vehicles seems to have omitted Tatas from its largesse.

As such, on the ground and at the market place the brotherhood between the heads of the two firms is missing. In any case the products of the two companies often jostle against each other for the same set of customers. Be it the Sumo and Bolero, Safari and Scorpio, Aria and XUV or Verito and Manza the similarities are for all to see. Rustic, rugged and inherently desi, it is in the rural unpaved roads that they go head to head. Day in day out.

Later this month, a new paradigm is set to be added to this story that has the markings of things getting ugly. On October 17, the two companies would end up launching a product on the same day, an inherently avoidable clash that now borders on an ego tussle. While Tata would launch the Storme, a long in the making next generation Safari, Mahindra would unleash its first offering from Korean Ssangyong — Rexton II.

To be fair, the two vehicles do not compete against each other. Storme would have a price tag starting from under Rs 10 lakh and going upto Rs 13 lakh. The Rexton belongs to a category that is one ladder up, with a price tag of Rs 18 lakh plus. More in the league of the bigger Fortuner, Endeavour and Pajero. Neither is the clash of two launches in the automotive space as catastrophic as say two films releasing on the same Friday.

Yet, it is an occurance that many companies in the past have worked hard to avoid. Mahindra and Tata have themselves for example fallen over each other to enquire on the launch date of Maruti’s new 800cc Alto. Incidentally, the Alto comes in just a day before on Oct 16. Clearly, none of them wanted to lose the spotlight of the day to a car as obviously important as an 8 year old bestseller. Even for the Quanto launch last month, Mahindra had painstakingly made sure that it did not clash with Nissan’s Evalia.

Quite evident then that the channels of communication have remained steadfastly closed between the two companies. And generally that happens only between two bitter rivals. What is even worse is, that even after the clash became obvious, none seems to be ready to back down. Almost as if it would be an admission of inferiority and a sign of weakness.

Mahindra says it had publicly announced it would launch Rexton in October. From the Tata side, the company says it had decided the date of launch beforehand. True. Its invite came just a day before Mahindra’s. Only 24 hours.

In this game of one upmanship between two desi companies, it would be the ‘foreigners’ sitting on the fence who would have the last laugh.

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