Mahindra Scorpio - Development

Development

Prior to the mid-nineties, Mahindra & Mahindra was an automobile assembly company. The company manufactured Willys Jeeps and its minor modified versions, with modifications carried out in India. In 1996, the company planned to enter the SUV segment with a new product which could compete globally. Since M & M did not have the technical knowhow to handle such an ambitious product, they devised an entirely new concept among Indian auto companies. Roping in new executives who had worked in the auto industry in western countries, such as Dr. Pawan Goenka and Alan Durante, the company broke the rule that says automakers must design, engineer and test their own vehicles while spending millions of dollars in the process.

The new Mahindra Scorpio SUV had all of its major systems designed directly by suppliers, with the only inputs from Mahindra being design, performance specifications and program cost. The design and engineering of the systems were carried out by suppliers, as well as testing, validation and materials selection. Sourcing and engineering locations were also chosen by suppliers. The parts were later assembled in a Mahindra plant under the Mahindra badge, being a well-known brand in India. Using this method, the company was able to build from scratch a new vehicle with virtually 100 percent supplier involvement from concept to reality, at a cost of Rs 600 crore ($120 million), including improvements to the plant. The project took five years to move from concept to final product. The cost was estimated in 2002 to be Rs 550 crore.