Mahindra’s rise in the Indian automobile market was unexpected, but can you believe that a tractor and passenger car manufacturer is now ready to take the aerospace by storm?

Key Takeaways:

·         After ruling the commercial and passenger vehicle segment, Mahindra & Mahindra (M&M) is ready to take off in aerospace

·         Mahindra has made strategic alliances with big giants for components and technology

·         Mahindra is now the largest Indian OEM component supplier to the global aerospace industry.

 

Mahindra & Mahindra is all set to do a ‘Scorpio’ in the sky

It was totally unexpected how Mahindra, a tractor and farm equipment manufacturer was able to replace India’s long-time market leader Tata Motors in no time especially in light commercial vehicle segment. You can also remember about the most successful Mahindra’s Scorpio, the SUV brand of the country, which ruled the Indian roads for a very long time and is still in demand. Now, the Indian company is ready to turn the pages in the Sky or we can say that it is all set to grow as a Scorpio in the sky as Mahindra Aerospace.

Well, Yes!! Mahindra & Mahindra is prepared to overwhelm the aviation industry with its entire array of offerings from components manufacturing to airplane making after ruling the four-wheeler and commercial segment of the automotive industry.

Mahindra is going to launch its Airvan-10, a ten-seater plane, globally in 2018’s second half. The Airvan-10 has received important safety certifications from Australian and American authorities. The certification approves airworthiness standards of smaller airplanes relates to structural loads, performance, stability, controllability and safety. Yet, the Airvan has not received endorsement from the Directorate General of Civil Aviation but the Airvan is certified in more than 42 countries.

But, the question arises is when did M&M enters the aviation industry?

Mahindra, an agro-to-auto pioneer, entered the aviation industry in 2009, after the acquisition of two airplane manufacturing firms in Australia. It had grabbed 75.1 percent stake in Aero staff Australia, a component manufacturer and in general aircraft maker Gippsland Aeronautics, for Rs 175-crore, with plans to make airplane and its components to serve the global aviation market.

At the same time, the company set up a component manufacturing unit for aerospace in Bangalore. Since then, the company is working at a high growth rate and expanding its operations globally in aviation industry.

The company has made some strategic alliances to move forward in the aviation sector:

·         In 2015, the company signed MoU with Magellan Aerospace to offer their mutual customers major structural assemblies, components and fabrications for the global market.

·         In 2017, GE Aviation and Mahindra Aerospace collaborates on manufacturing opportunities for aero structures.

·         In 2017, Mahindra Aero structures and France-based Segnere SAS have signed a Memorandum of Understanding (MoU) to support each other’s growth in competences to meet altering requirements for the global aerospace market and collaborate on airframe manufacturing opportunities.

What makes Mahindra to enter the Indian Aircraft Market?

India is ready to become a huge market for aircraft. With growing number of passenger travelling by air and expanding military and defence expenditures, the interest in airplane for both civil and defence, is expected to rise. The local network push in India, specifically, will give a major lift in the general aviation industry.

According to Ministry of Civil Aviation, Under the Regional Air Connectivity Scheme, planes will serve a network of at least 200 existing and new regional airports in small cities and remote regions across the country. The RCS routes would cover a length between 200 to 800 km.  The government also thinks that small 8 to 20-seater aircraft will be ideal for these routes, which are unlikely to witness heavy traffic.

Mahindra is already assembling the 5, 8 and 10 seater aircrafts which will drive the purpose of India RCS scheme. As the government of India is looking to bring 200 smaller airports into the aviation network, this move of Mahindra will open a large market for the small plane in India.

Moreover, Mahindra groups mentioned that they have signed an agreement with the Indian Government’s ‘Make in India’ initiative to accelerate India’s participation in the global aerospace industry.

How this move of Mahindra in aviation industry is going to benefit the other sectors?

We can say that yes, the aviation industry is going to see the highest growth rate than ever over the next five years backed by the mergers and joint ventures in aviation industry and government spending in the sector. Mahindra is playing smartly to upper hand the global market whether you talk about the passenger car segment, commercial segment, talk about electric cars and yes now of course the aviation industry. It sounds like Mahindra is everywhere.

But, this not only going to affect the only the aircraft manufacturers only but also the aircraft components manufacturer and suppliers. We can take up an example of Head-up-displays, which is the most important component in an aircraft, this boom in aircraft manufacturing is going to boost the demand of Head up displays like anything. Head-up display is being extensively implemented in areas such as military aviation and civil aviation, where both segments include aircraft and helicopters. According to Techsci Research “Global Head-up Display Market By Technology, By Component, By End User, Competition Forecast and Opportunities, 2011 - 2021”, global head-up display market is projected to grow at a CAGR of over 20% during 2016-2021.

 Source: Techsci Research

Mahindra will benefit from the aviation sector or not, but other industries are going to see a silver line in their dark clouds as this will generate the demand for many other markets like traffic management. But How?

Yes, growing number of travellers, booming tourism industry, emergence of low-cost airline carriers and surging demand for new airplanes are going to affect the traffic in airlines. Thus, the rising demand of the aviation industry is booming the demand for traffic management market globally. According to Techsci Research “Global Traffic Management Market, By Transportation Mode, By System Type, By Region, Competition Forecast and Opportunities, 2011-2021”, global traffic management market is projected to surpass US $ 22 billion by 2021.

All sections inside the aviation business, together with civil and military aircrafts, are demonstrating a sizeable level of increment. There are a few components driving increment underway in India's airplane business. Both macro and macro factors are driving the aviation industry whether you talk about the components or something else. Let’s see how far Mahindra will go in this sector.

Conclusion: There are still several challenges in the aviation industry for Mahindra such as funding, technology, availability of raw material and high cost of raw materials and so many undergoing certification processes. But with so many strategic partnerships and alliances Mahindra is trying harder to be the best in the game of aviation sector and there is always light at the end of the tunnel.