Automobile manufacturer Mahindra & Mahindra has created a new business vertical that consolidate all its after-market initiatives in the automotive space. The new business vertical, named "after-market sector" will consolidate M&M's multi-brand service chain Mahindra First Choice Services Ltd, its pre-owned vehicles business Mahindra First Choice Ltd and spares business and Mahindra Spares Business.

The group expects the rapidly growing automobiles market in the country of  six million cars currently that are expected to grow to 17 million by 2015 to open a new business segment in the organised sector in the country where it would like to have an early-mover advantage.

"With the growing population of vehicles in India there is vast untapped potential in the after-market space covering multi-brand pre-owned vehicles, servicing, spares, and the financial instruments and exchange platforms which support this value chain," said Anand Mahindra, vice chairman and managing director, Mahindra Group.

Mahindra also said the new business vertical would "create a business ecosystem in the organised sector, which replicates the ecosystem for new vehicles".

This new sector will be headed by Rajeev Dubey in addition to his current portfolio, who has been redesignated president (HR, after-market and corporate services) and member of the group management board, Mahindra & Mahindra Ltd. The CEOs of consolidated businesses will report to Dubey

"In India, the car servicing market mainly comprises authorised repairers and independent garages. Our market research has shown that car owners would prefer a service outlet such as ours with a value proposition built on trust, customer experience and convenience," says Dubey.

"The integration of the multi-brand pre-owned car business with the multi-brand service chain business and the spare parts business will help M&M create a distinct niche for itself in the after -market space," he added.

In addition, the company has has lined up a growth strategy through green field projects and through acquisitions; it has been acquiring US and and European components makers, and had early this month bought Italian gear manufacturer Metalcastello in a tie up with private equity firm ICICI Ventures (See: Mahindra & Mahindra and ICICI Venture to acquire Metalcastello S.p.A.).

M&M has aggressive investment plans plans to double capacity and launch new vehicles. Last month it announced an additional investment of Rs1,500 crore to double the capacity at its proposed Rs2,500-crore manufacturing plant at Chakan, near Pune. The plant, with proposed overall investment of Rs4,000 crore, will assemble medium and heavy commercial vehicles to be produced by joint venture company Mahindra International, and other products slated to hit both the domestic and global markets. This will take its total investments to Rs7,500 crore.

In January 2008, M&M had parted ways with joint venture partners Renault and Nissan, which would have otherwise seen the company set up a Rs4,000-crore greenfield manufacturing unit at Chennai in Tamil Nadu, with an annual production capacity of 400,000 units – both cars and utility vehicles. (See: M&M pulls out of investment in Chennai plant; Renault, Nissan to proceed with greenfield project) would put 40 billion rupees in a new plant that would have a capacity to make 300,000 commercial vehicles.