Soon after launching a 30 HP tractor last Saturday in Nanchang, China, Anand Mahindra made a beeline for Phuket, Thailand. The 50-year old vice chairman and managing director of auto major Mahindra & Mahindra (M&M) didn't go there to soak in the sand and surf, but to finalise another deal.

Along with his brother-in-law, sports commentator Charu Sharma, Mahindra was there to fulfill one of their long-cherished dreams of buying a yacht.

In fact, the sea might have been the Harvard-educated Mahindra's passion for long. But for now, he wants to ride the fast track of the auto world. He wants to transform the Rs 11,000 crore (Rs 110 billion) M&M group into a full-fledged auto company, driving everything from two-wheelers, tractors to cars, multi-utility vehicles to light and heavy commercial vehicles like trucks and buses.

That's why he has been hedging his bets, particularly in the last year, striking deals right, left and centre for manufacturing, marketing, outsourcing, and embarking on shopping sprees for auto-component units across the world, to exploit both scale and synergies for each of the group's 40-odd companies.

He is pumping in Rs 1,200 crore (Rs 12 billion) to build capacities and new products as he wants to make M&M a global juggernaut with revenues of $5 billion in the next three years, with exports chipping in a good 30 per cent, up from the current 8 per cent.

Says Mahindra, "Our aspiration is to build a global household brand which is rugged, reliable and peoplecentric." Adds Pawan Goenka, the freshly anointed president of M&M's automotive sector, "We can't remain competitive unless we have a global presence. We want to become the Land Rover of the sports utility vehicle (SUV) market."

Driving these aspirations is the company's self-proclaimed showpiece -- the indigenously developed and built SUV Scorpio, which is leading Mahindra's rally in both the domestic and global track.

Launched in 2002, today, 2,400 Scorpios are sold per month in the domestic market and 250-300 units in the global markets of South Africa, Italy, Greece, the Middle East and Malaysia.

So far so good. But the Scorpio was launched two years ago. And today, like changing hemlines, a product pipeline is the key to a company's ride on a competitive terrain. "Anand Mahindra is aware that if he wants to capitalise on the momentum created by Scorpio, his brand buffet has to include a wider fare," says an auto analyst at a leading securities firm.

That's why, in the last few months, this quest for a global footprint saw M&M pick up auto-component units and announce two high-profile joint ventures. Just last week,

Mahindra addressed the first board meeting of Mahindra China Tractors, an 80:20 joint venture with Jiangling Motor Co Group after acquiring the tractor manufacturing assets of its subsidiary -- Jiangling Tractor Co.

In February, it flagged off Mahindra Renault Ltd, a 51:49 product specific joint venture with France's Renault Group. From 2007, it will make and sell Renault's car Logan in India to take on the fast-growing small car segment.

With a target of 50,000 cars per year and investments of Rs 700 crore (Rs 7 billion), Logan will be manufactured at a new plant to be set up in Nashik, Maharashtra. What's more, the cars will nestle under the Mahindra Renault brand name.

Then, three weeks ago, it tied up with America's International Truck and Engine Corporation to manufacture and market light, medium and heavy commercial vehicles for both the domestic and export markets.

The 51:49 company, christened Mahindra International Pvt Ltd, will have a project outlay of Rs 400 crore (Rs 4 billion) for making trucks and buses. It will transfer its light commercial vehicle business based in Hyderabad, where it has been churning around 3,000 trucks, to the venture.

Just how important are joint ventures to the group's global ambitions? "Very important. You can call it the second wave, where we are now going to manufacture the vehicles ourselves," says Goenka.

Adds Mahindra, "For us, it is a win-win situation in both the joint ventures. I am developing engineering skills on the back of the JVs."

If Mahindra is feeling jubilant today, it is more to do with the nature of his newly forged alliances. For one, as the majority stakeholder, he is in the driver's seat in both the ventures, a reverse gear from his mid-'90s joint venture with Ford Motors.

"Here, I am managing the company, making their products in India and getting economies of scale and my distributors are happy as they have a product pipeline. Today, scale is not an issue for me. There is also a talent osmosis for research and development," he claims.

Now look at how it fuels M&M's global blueprint. The ventures will also source the vehicles from India to roll out in other developing markets around the world. They also have the option of sourcing auto-components from M&M.

And if all goes well, Goenka claims that the flagship Scorpio will be manufactured at Renault's Dacia plant in Romania. This will then be marketed in the developing European pockets through Renault's distribution network.

"For us, taking the Scorpio global through Renault is important," he says. Unlike assembled kits, it will also be the first time an Indian auto maker will make its vehicle on foreign shores.

Adds Bharat Doshi, the group's executive director and chief financial officer, "What it does for us is the complete derisking of our business while exploiting all our synergies. With all these moves, we can now leverage our existing financial muscle for better profitability."

Today, the automotive sector accounts for 60 per cent of parent Mahindra & Mahindra Ltd's Rs 6,600 crore (Rs 66 billion) of net sales, with the farm equipment business pooling in 30 per cent. Last fiscal, profit after tax was up 47 per cent to touch Rs 512.7 crore (Rs 5.127 billion).

In fact, compared to three years ago, M&M is in a much better financial position. Last year, it issued a $100 million foreign currency convertible bond (FCCB) issue, the money which is being used for further acquisitions and increasing capacities.

"With a 0.3:1 debt equity ratio, see the leveraging ability we have now. For us, the issue now is not of how to raise funds but finding the right acquisition. Every venture we are going into should be more than the cost of capital. We want to take maximum sweat out of our assets," says Doshi.

He points out to Mahindra Finance which accounts for 4 per cent of revenues but 12 per cent of profits for the group, which he believes "has the potential to explode". "It is a strategic tool for both the auto and tractor business. And we can use the same backbone for insurance as well," he adds.

In all this, industry experts claim that M&M is taking the safe way out. They say that being a safe player, Anand Mahindra's latest route is more strategic than patriotic. They claim that unlike the Tatas, which produced an indigenous car, M&M is fulfilling its ambition of becoming a full-fledged auto maker by piggybacking on foreign players.

This despite shopping smartly around the world for the Scorpio. "It is becoming a launch pad for foreign entrants into India. Look at its joint ventures. What happens to M&M if the foreign player gets a feel of the market and then sets up operations on their own?" asks a competitor.

Goenka claims that M&M did consider the option of making its own car, but it would have taken a good seven to eight years. "With a foreign partner, you are on the road in two years," he says.

Mahindra is in no mood to change gears. He is not apologetic about not replicating the Tata model for cars. "For us, it is not about making a car ourselves. It is about a strategic brownfield as opposed to a greenfield. A concept of having a big brother out there is not there in India. For me, joint ventures help get further synergies without losing focus," he says.

What focus? What does M&M stand for today? Rajesh Jejurikar, executive vice president marketing & sales, automotive sector M&M (now named managing director, Mahindra Renault), says: "We are using the JVs to give us scale while we are still being focused on our core business of making multi-utility vehicles. With aspirations of becoming a global player, we realise the obvious benefits of bringing in alliance partners which will allow us to straddle different segments and achieve scale."

Mahindra likes to call his group a niche player. He claims that it gives him the ability to be nimble, agile and focus while "building a global brand DNA".

But is it sustainable? Auto analysts say that there is no cause for worry as Mahindra is on firm ground. The M&M scrip which was Rs 497.15 at March end is hovering close to Rs 600 levels. No wonder then, Anand Mahindra is so bullish. "I am building an offshoring business. I am not the M&M of 1993," he says.

Going Native It is a class with a difference. Every Saturday afternoon, between 2:30 and 4:30 pm, a handful of erudite executives turn students at Mahindra & Mahindra's office in Mumbai's Worli district. They are all rolling their tongues, trying to pronounce words which they would have otherwise massacred. "Antonie is called Ontua and not Anthony," says the lady at the helm of the class, scribbling with her black marker on the board. And they all go "Awwnntuva". Such scenes have become commonplace for the past one-and-a-half months at M&M. The French class conducted by the Alliance Francaise is aimed at managers of the newly formed Mahindra Renault, the 51:49 joint venture between M&M and France's Renault Group. With Renault manufacturing its small car Logan at Mahindra's new plant to be set up in Nashik, they are going through the rigours of learning more about their joint venture partners. In another corner, another lady talks animatedly in a Serbian dialect. That there are only a couple of people listening to her doesn't bother her. She is here to do her job -- educate her wards on the intricacies of East European culture. A regular at such dos is Rajesh Jejurikar, the freshly minted managing director of Mahindra Renault. "It helps you to understand your partner better," he says. Such initiatives are part of M&M's new drive to go global. For some time now, its tractors and multiutility vehicles have been hitting the global markets. If tractors are sold in the US, Australia and China, the Scorpio has hit the road in South Africa, Middle East, Greece and Italy. "You may not be an expert on that country, but you are able to appreciate the finer points of their culture," says V S Parthasarathy, vice president, business planning & international operations, tractors division at M&M. His men in Spain, Portugal, Serbia and now China learnt the rudiments of the native culture there before embarking on their new mission. "I bunked a few classes," says Parthasarathy sheepishly. But that's because he was away on tour.