SML ISUZU acquisition: What does it mean for Mahindra & Mahindra?

Mahindra & Mahindra has acquired a 59% stake in commercial vehicle manufacturer SML Isuzu for Rs 555 crore via its subsidiary Mahindra Trucks and Buses Division. Through the acquisition, Mahindra & Mahindra is looking to gain a 10-12% market share by FY31 and a 20% market share by FY36 in the commercial vehicle segment. At present, Mahindra Trucks and Buses Division holds a 3% market share in the CV segment.
 
“A lot of this market share is going to come from the LCV (light commercial vehicle) and ICV (intermediate commercial vehicle) segment. We are mindful that we should have realistic expectations in the shares that we gain in the MHCV (medium and heavy commercial vehicle) segment. In the MHCV segment, including buses, we have a 2% market share,” says Rajesh Jejurikar, executive director & CEO (Auto & Farm) business at Mahindra & Mahindra Limited.
 
“The growth will come from areas of strength for us, i.e. LCV and ICV,” he adds.
 
SML Isuzu sells the popular brand Swaraj Mazda. Following the acquisition, the company doesn’t intend to use the Swaraj brand, says Anish Shah, MD, Mahindra Group. 
 
While the acquisition is likely to strengthen M&M’s CV portfolio, it will also aid the company in grabbing a pie in the bus segment. M&M has no presence in the bus segment. “One of the strengths of SML Isuzu is the bus segment. The market share that they have in the bus segment is close to 16%. When we add Mahindra’s market share in that segment, it takes the market share to 21%... We expect that segment to grow in time,” notes Jejurikar.
 
The company is, however, not looking in the MHCV segment. “With SML, we get a very strong brand when it comes to school buses and staff buses. Neither SML nor Mahindra Trucks and Buses is into MCV buses, and we don't intend to focus on these as sub-buses or large luxury intercity buses. We are not getting there. But cumulatively, we have a market share of 21% in school staff and executive coach buses. We are becoming number three… So, LCV-ICV buses and LCV-ICV trucks are going to be the major focus with both SML and MTV put together,” says Vinod Sahay, President – Aerospace, Defence, Trucks, Buses & CE at Mahindra & Mahindra. 
 
A key part of this acquisition will be towards sharing platforms. The SML Isuzu is likely to help Mahindra & Mahindra retain momentum in the e-bus and CNG bus segments, where the company doesn’t have any presence. “SML has a very strong CNG range, but Mahindra Buses & Trucks is still not there. We are trying to develop one now. All these are the areas we can optimise in terms of sharing each other's aggregates. EV is another area where SML is working. We have not worked on a large amount of cross-platform sharing, which will be done, including aggregates,” says Sahay.
In FY25, SML Isuzu overall sales witnessed a 3% increase to 14,221 units as against 13,797 units sold in the previous financial year.
 
The SML Isuzu acquisition comes at a time when the light commercial vehicle is expected to revive this fiscal year, after sluggish growth in FY25. According to ICRA, wholesale volumes for the domestic light commercial vehicles (LCV trucks) are expected to see a modest 3-5 per cent YoY expansion in FY26, after registering a flattish growth or marginal contraction in FY25.