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M&M Chairman Anand Mahindra (center left) with Michigan Lieutenant Governor Brian Calley at the launch of the Roxor.

(From left) Rick Haas, president and CEO, MANA, with Mahindra & Mahindra’s Rajan Wadhera, president - automotive sector, and Pawan Goenka, managing director at the event to reveal the Roxor in Detroit.

Corridor before renovation

Corridor concept design

Corridor after high school art installation

Cafeteria concept design

Cafeteria before renovation

Cafeteria after renovation

EYES ON THE OFF-ROAD
PMI India

MAHINDRA AND MAHINDRA SETS UP DETROIT PLANT IN SEVEN MONTHS, WITH A CLEARLY LAID OUT STRATEGY AND THOROUGH PLANNING - PANCHALEE THAKUR

In November 2017 when India’s leading automotive company Mahindra and Mahindra (M&M) opened a manufacturing facility in Detroit, US, it captured headlines both in India and the United States. M&M became the first Indian vehicle manufacturer to set up shop in America’s car capital, and the first company in 25 years to open a new facility there. The news came in as renewed hope in the turnaround of this city that has in recent years seen bankruptcy, massive job loss, sharp drop in real estate prices, and a declining population.

M&M chairman Anand Mahindra’s reported comment at the launch conveys the underlying sentiments: “That’s a major milestone where an Indian automotive company is opening up manufacturing in a resurgent Detroit. I think that’s a wonderful twist of history.”

The company is investing US$ 230 million in the plant in Auburn Hills, Detroit, that will turn out 5,000 vehicles in a year and reportedly create 250 new jobs. In this plant, Mahindra Automotive North America (MANA) will manufacture its Roxor off-road vehicle which is a heavily redesigned variant of the Mahindra Thar that the company sells in India.

Besides this plant, MANA has two other facilities in the state of Michigan – a prototype engineering operation in Troy and a large warehouse/logistics center in Pontaic. Mahindra also operates a plant in Ann Arbor that manufactures electric scooters.

HOW IT ALL STARTED
Serious discussions around setting up a dedicated production plant in the US gathered momentum in the third quarter of 2016. In February 2017, a proposal was presented to the company’s board. Among the key considerations for a location for the plant was its ability to house an advanced manufacturing facility and a product engineering division. It also had to be suitable as the company’s North American headquarters. Detroit was the top choice since it would give the company access to the city’s vast engineering talent and a thriving automotive supplier ecosystem.

Roxor is the brainchild of the company’s engineering team, which proposed it to the leadership team at the Detroit-based Mahindra North American Technical Center (MNATC). It is a vehicle inspired by its Thar all-terrain vehicle in India, but heavily adapted for the American off-highway market. A small MNATC team then started developing the program in a “skunkworks” manner — in other words, a fast-track project that looked at disruptive ways to bring the proposal to life.

“The goals for the program quickly centered around showcasing M&M’s rugged DNA and brand heritage to the US consumer – with the overarching objective of determining how Mahindra’s brand would play in the US in a broader sense,” said Rick Haas, president and CEO, MANA. Mahindra is a known brand in the tractors segment in the US, an operation the company runs separately from the other businesses.

Important timelines Developments
Early-2015 First demo vehicle developed.
Mid-2015 The product planning team held consumer clinics to gather feedback and worked on new concept designs. In-house experts started liaising with regulators and industry bodies to understand policies and gather competitive information on the offroad segment.
Mid-2016 Discussions picked up around the feasibility of starting a production facility in the US.
Mid-to-end 2016 Series of working prototypes of the vehicle developed.
February 2017 Proposal approved by the M&M board.
Mid 2017 Pre-production prototypes developed.
October 2017 Production of the Roxor starts.
March 2018 First set of vehicles roll out of the plant.

PROJECT PLANNING TO FULFIL INVESTMENT STRATEGY
For the MANA management team, it was extremely important to get the investment strategy right. The team had to put in place a plan that would keep costs low and allow for plant expansions to accommodate future spikes in demand.

“On the one hand, as the Roxor creates a new category, we had to be mindful of costs since there was no clear sales history or competitive offerings against which we could benchmark our product. On the other hand, by launching Mahindra’s first automotive style vehicle in the US we had an opportunity to showcase our plant and the product in the best possible light,” said Robert J. Eickholt, vice president, manufacturing, MANA.

The mandate for the team was:
• Flexible, quality-oriented, low-investment manufacturing;
• A highly configurable vehicle unmatched in the segment; and
• Allowance for future volume increases and product complexity.

The team faced a number of challenges to fulfil these project objectives such as:
• Determining they had a viable product and business plan, given that there was no exact equivalent in the market;
• Understanding and following the various certifications, compliance requirements and expected usage applicable in the US off-road market, including state-specific requirements;
• Facility selection and procurement, and completing major renovations of the facility in six months (during a period of expansion and growth in the US);
• Integrator support for a project considered small in the US automotive market; and
• Unique logistics associated with bringing a partial product from India to the US and creating a completely different variant at the US assembly site.

Aggressive Timelines for Product Engineering, Plant Renovations
The company’s program management office that generally oversees new product development and program execution was not involved in this project. Instead, MANA used its manufacturing team with deep experience in planning, estimating, procuring, and executing automotive production systems in its planning and execution.

The team made extensive use of Gantt charts with timing flow and critical path analysis to ensure there was no slippage in the project’s strict timelines. The project plan was executed and maintained by the Roxor plant facilities and equipment manager.

To ascertain the feasibility of the product in the US market, MANA organized consumer clinics, benchmark forums, and segment research. These studies provided insights into consumer preferences and competitor information, which help gauge product demand. The planning and marketing teams synthesized these insights into the overall program objectives to give a final shape to their proposal.

To understand the highly regulated US market, MNATC and MANA developed a group of in-house experts to work with regulators and industry groups. Having a focus group to manage this cumbersome work helped speed things up.

Getting the facility ready on time was critical for the success of the project. The company decided to put together an in-house team to oversee the renovation and hire smaller, local firms with whom the company has had experience working in the past, for the job. “These firms pulled out all the stops to keep the renovation on track. The in-house team at MANA worked directly with them on an hour-by-hour basis to ensure that the entire process proceeded smoothly,” said Eickholt.

Since the company had planned the Detroit plant as a low investment facility, it deployed a basic manual vehicle painting and assembly line. When demand picks up, it can be reconfigured and automated. “The manual build process is supplemented by a system of automated process checks such as monitors at each station that provide specific instructions and enable the correct tool for each operator to ensure that all assembly steps are complete,” he explained.

It took MANA seven months from the time it took possession of the site to complete extensive renovation and rebuilding work and get the facility production ready. But, for the team there is no time to rest on its laurels. After just two months into production, the company wants to reconsider its production volume. Currently the plant has a conservative production capacity of 5,000 vehicles per year on one shift of operation. Encouraged by the market response, MANA plans to soon start ramping up production and become a formidable player in the American off-road segment.

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