Mahindra Group is pursuing a dual-brand strategy to expand its presence in the commercial vehicle segment.

The company plans to operate SML Mahindra and its Mahindra Truck and Bus Division as separate entities with distinct positions, while leveraging synergies across sourcing, engineering, and network operations to support growth, address portfolio gaps, and improve profitability, according to a senior company official.

"Both brands have their own strengths, and they will continue. They stand for quite different things in the market. Mostly, they do not cannibalise each other; they have independent networks, and hence they are continuing," said Vinod Sahay, Chairman - SML Mahindra & Mahindra Advanced Technologies and President - Aerospace, Trucks & Buses, during an earnings call.

"Going forward, the company will continue to evaluate which brand can play a greater role in specific segments, although this will be undertaken gradually. The strategy remains that customers will continue to have a choice between the two brands," he further added.

The dual-brand approach is part of Mahindra's plan to expand in the medium and heavy commercial vehicle segment, where its current presence is limited. The group is targeting a scale-up, with the objective of becoming a top-three player over time.

"The main thesis behind this acquisition was growth. These are two challenger brands that have come together, and the objective is to become a top-three player," said Amarjyoti Barua, President and Group Chief Financial Officer, Mahindra Group.

Barua further added that while profitability is expected to improve through integration, the primary focus remains on expanding market share. "Profitability will improve on a combined basis because of the factors mentioned, but the primary reason for bringing these two companies together remains growth," he said.

SML Mahindra has ruled out immediate structural changes, such as delisting or a merger with the Mahindra Truck and Bus Division, indicating a phased approach to integration.

"As far as the question related to the delisting of SML is concerned, the answer is no. At present, the focus is on a long-term strategy. Further details will be shared at an appropriate time," Sahay said.

Network expansion

The initial phase of the integration between SML and Mahindra is focused on strengthening the service network, a factor influencing commercial vehicle purchasing decisions, according to the management.

Independently, both brands have approximately 300 touchpoints each, resulting in a combined network of about 600. The company has identified 150 service outlets for cross-support, of which 70 are operational, while the remaining are expected to become operational within the current quarter. This is expected to increase each brand's effective service reach to around 450 touchpoints, according to Sahay.

However, SML Mahindra is proceeding cautiously with dealership integration to avoid disruption to existing investments and overlapping networks. "The approach will remain cautious, particularly in cities where both brands already have dealership networks, in order to avoid disruption," Sahay said.

In underserved markets, the companies may appoint common dealers to expand reach. "In such cases, appointing a common dealer is viable, as the combined offering of both brands presents higher potential," Sahay added.

Synergies across sourcing, engineering, and manufacturing

According to Sahay, integration between the two brands is being driven primarily through backend synergies, including sourcing, engineering, and manufacturing efficiencies. The companies are also evaluating a cross-badging strategy to address product gaps, enabling faster portfolio expansion without significant additional investment.

"The strategy of cross-badging is being explored, whereby products not available within one brand can be offered through the other. This forms part of the integrated product strategy," Sahay said.

The company is using combined scale to reduce sourcing and development costs, particularly in areas such as advanced driver assistance systems (ADAS), which are expected to become mandatory in the commercial vehicle segment in phases during 2026 and 2027.

"This is a combined project, which has resulted in savings in unit cost as well as a reduction in development expenditure," he said.

Engineering synergies are another area, with SML gaining access to Mahindra's research and development capabilities, including mobility research platforms and technical expertise.

"Engineering-related synergies are significant. SML has limited capabilities in areas such as engine development or ADAS, and access to Mahindra's resources is expected to accelerate development timelines," Sahay said.

In addition, integration across manufacturing and sourcing is expected to improve cost efficiency and reduce capital expenditure over time. "Early benefits are already visible on the sourcing front, and manufacturing synergies are expected to reduce both costs and capital expenditure," he added.

Mahindra & Mahindra completed the acquisition of a controlling 58.96% stake in SML Isuzu for a total consideration of Rs. 5.55 billion (US$ 59.4 million) in 2025. The company stated that the acquisition forms part of its plan to strengthen its position in the above 3.5-ton commercial vehicle segment, where it currently holds approximately 3% market share, compared with 54.2% in the sub-3.5-ton light commercial vehicle segment. With the integration of SML's portfolio and network, the company aims to double its overall commercial vehicle market share to 6% in the near term, and expand it to 10-12% by FY31 and over 20% by FY36.