MUMBAI, India -- Anand Mahindra was at the World Economic Forum in Davos, Switzerland, last year when Robert Lane, chairman of U.S. farm equipment concern Deere & Co., approached him."I've been to your dealerships and seen all your manuals," he told Mahindra, whose Mumbai-based Mahindra & Mahindra Ltd. has been taking on the maker of John Deere tractors in the U.S. market. Well, replied Mahindra with a laugh, "that's good news and bad news."The bad news is that the world's biggest tractor maker has put Mahindra & Mahindra in its sights. The good news, both for Mahindra and India, is that a behemoth like John Deere is worried enough to bother.Indian manufacturers have never troubled the sleep of executives in the rich world. India is well known for its outsourcing and information technology skills -- even, more recently, for the global shopping sprees of its acquisitive billionaires -- but its manufacturers are minnows beside the sharks of China, South Korea and Taiwan.Gradually, that has begun to change. India's manufacturing industry grew at an annual rate of 9 percent over the past four years, on pace with its booming economy. Boston Consulting Group predicts that India will be the 11th-biggest global manufacturer by 2015 and the seventh-biggest by 2025, up from 14th in 2005.Mahindra, 52, is one of the reasons. The urbane, Harvard-educated business leader has taken his family firm from a staid domestic maker of jeeps and tractors to a global player with ambitions in everything from SUVs and auto parts to movie making and time share resorts. In naming him Businessman of the Year for 2007, Business India magazine called the M&M managing director "the poster child for the global Indian."His M&M has dealerships in 25 countries and subsidiaries in Europe, Australia and South Africa. Its revenue has grown 20-fold in 17 years.Already the largest tractor maker in the world's largest tractor market -- India -- it has become third largest in the world by units sold and plans to be first by 2010. It makes India's most popular SUV, the Scorpio, and has joined with France's Renault to make the Logan, a no-frills sedan for Indians. It plans to launch the Scorpio and two models of pickup truck in the U.S. market next year. "On the manufacturing side, they're top class," said Jamshed Dadabhoy, an analyst with Citigroup in Mumbai.Mahindra is the first to admit that Indian firms still cannot compete with the cheap skilled labor and first-rank infrastructure of Chinese manufacturers. "If we had to put out a million Barbie dolls, we just couldn't," he said.But India has some distinct advantages: a sophisticated stock market where companies can go to raise money in a hurry; a young, eager work force; the English language; and, above all, well-managed, forward-looking companies such as M&M.While China's leading companies tend to be run or heavily influenced by the state, India's are more often private, family-owned conglomerates -- sprawling business houses with storied names like Birla, Tata and Ambani. After decades of stifling government regulation, these firms are emerging as fierce global competitors under a new generation of leaders.Mahindra is a typical product of that generation. Like many educated Indians, he is charming, hospitable and effortlessly articulate. A sought-after luncheon speaker, he mixes quotations from T.S. Eliot with references to Hindu mythology. Instead of poring over earnings reports on the weekend, he sets sail on his 45-foot catamaran Dreamcatcher, taking the helm while his fashion-editor wife, Anuradha, "balances her champagne glass."To keep his senior executives mentally flexible, he takes them to Harvard every year for sessions not just on business strategy but science, public policy and philosophy, with concerts to enliven the evenings. He calls the program Mahindra Universe.But don't mistake his sense of balance for detachment. Like many Indian business leaders, he is impatient to see India catch up with its global rivals. "A company like ours -- whose DNA is Indian, whose character is Indian, who wants to become an Indian multinational -- well, if this succeeds, it's a sign that Indian business in general has what it takes to succeed," Mahindra said in an interview in his company's Mumbai office tower. "If we don't, there's something wrong."Mahindra traces the firm's competitive zeal to its founders. His paternal grandfather, J.C. Mahindra, became India's iron and steel czar during World War II, rationing the precious commodities in a time of shortage. J.C.'s brother, K.C. Mahindra, was the head of India's supply mission in Washington. As India's economy took off, Mahindra launched new products like the hardy Scorpio, which withstood competition from established brands such as Honda, Ford and Toyota to grab a quarter of the domestic market. Plans for an eco-friendly hybrid are on the books.But Mahindra seems proudest of M&M's success against Deere & Co., the Illinois company founded in 1837 whose green-and-yellow vehicles are a symbol of American industrial might. "John Deere considers us enemy No. 1," says Mahindra. "We are the little baby cobra they have to kill."(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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