Mahindra & Mahindra has a dream.

Over the next eight years, this Mumbai-based company yearns to join the ranks of the world’s 50 most admired companies.

“When we go outside of India, or even within India, our objective is not just to sell more automobiles or IT services to make more money,” said Pawan Goenka, president of Mahindra’s automotive and farm equipment sectors, in an interview with The Korea Herald.

As the manager of the two core units of a $16 billion industrial group in more than 100 nations, he offered a rare glimpse into the company as a global enterprise and not “the Indian firm that bought Ssangyong.”

“We deal with our customers and stakeholders in a way that they want to do business with us. That they admire the way we do business,” he said. “Everything about Mahindra stands for everyday heroes, people who really are working hard and making it work.”

This is reflected in the corporate philosophy of “RISE” the firm has adopted. It means what it says: To enable people to “rise.”

Mahindra & Mahindra is a part of the Mahindra Group, which despite having been set up by a family, is far from being a conglomerate.

Federation, not a conglomerate

“We don’t call ourselves a conglomerate. We are a federation. So we are not a unit that has all the perceived negative traits of a conglomerate,” Goenka said.

While the staff and funds of different units are often combined to work for synergy, the dominant management concept is that the independence of each president or CEO is respected to the utmost.

Put into Korean corporate terms, it means the top brass doesn’t have owners constantly breathing down their backs or threatening to hand them a pink slip at whim.

To discipline itself and not slip into “bad” conglomerate habits, Mahindra puts self-limits on its market share.

“In the auto business for instance, Mahindra has an 11 percent market share. In motorcycles, it’s even smaller at less than 1 percent. In financing, we have 8-10 percent. This is because we don’t want to create any unfair advantages,” Goenka stressed.

Further, Mahindra’s Chairman and Managing Director Anand Mahindra is the sole member of the founding family that retains a predominant position in the company’s management.

These moves have shaped a positive public opinion toward Mahindra, which for several years earned a Level 1 rating for governance and value creation from CRISIL, India’s leading ratings, research and risk advisory company.

The journey to where Mahindra stands today was by no means easy. First of all, in order to achieve its goal of becoming an admired firm, the company had to build a strong financial foundation.

“We want to move beyond profit, but profit is also important for doing the things we want to do,” Goenka said.

From the early 1990s up until now, Mahindra’s research and development capacity has grown to 2,500 respected staff from the initial 100.

The company also learned manufacturing from its joint venture with Ford in the mid 1990s.

Building up the brand

Cars such as the Scorpio helped Mahindra lay the cornerstone for its current strength and foothold in SUVs; Mahindra is the largest sports utility vehicle maker in India.

“We have completed our journey and reached the level where we can compete with anyone else, at least in the Indian market,” Goenka said.

But he acknowledged that brand-building goes beyond manufacturing.

“It’s not something you can learn and it’s a slow process,” he said. Brand and marketing development for Mahindra started as late as the early 2000s, but time and money were heavily invested and now the company feels it has reached the top level in India.

With the ranking grew social contributions, and to this day, Mahindra puts aside 1 percent of its profits for social causes.

Ssangyong, REVA and beyond

Acquiring Ssangyong Motor and REVA Electric Car was another strategy Mahindra deployed to expand its brand and global reach.

“Ssangyong and REVA are a part of our effort to build a brand, an effort to work with these companies to improve our ability as a group to design better products and offer better quality,” Goenka said.

In fact, he wants Mahindra to be known as a “good owner” for Ssangyong, with the two working as two firms to create a single, respected global car brand.

M&As are never easy, and in Mahindra’s case, it was exacerbated by the profound sense of resentment Korean consumers and possibly even Ssangyong initially harbored toward the Indian stakeholder.

Korea had a taste of “soulless foreign capital” in the days following the Asian financial crisis and wanted no more of it.

It took Mahindra a long time ― over two years ― to prove otherwise.

“The best thing over the past two year is the confidence that is growing among our own people, among Ssangyong and among customers who see Ssangyong as a stronger company bringing out new products and a company that will be there, instead of disappearing soon,” Goenka said, pointing to Ssangyong’s rise to become the fourth-largest carmaker earlier this year.

“Our next step is to become No. 3,” he said.

Mahindra’s constant drive for innovation, such as to build and promote hybrid and electric cars, will be a factor helping Ssangyong play faster catch-up and also keep local rivals on their toes.

Mahindra currently has plans for converting two of its diesels and a sedan into electric cars within a year or a year and a half at most. The hybrid car won’t be as quick, but Samsung SDI has already been selected as a battery partner.

“Samsung, with an extremely high quality conscious approach, could match our technical requirements and calendar life targets,” Goenka said, adding that Samsung was highly respected in India, along with Hyundai and LG.

By Kim Ji-hyun (jemmie@heraldcorp.com)