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Mahindra to set up assembly plant in US

Utility heavyweight Mahindra & Mahindra (M&M) is setting up a factory to assemble its vehicles in the US, reports Suprotip Ghosh.

autos Updated: Feb 24, 2008 21:07 IST
Suprotip Ghosh

Utility heavyweight Mahindra & Mahindra (M&M) is setting up a factory to assemble its vehicles in the US. The Scorpio, the new Ingenio, other sports utility vehicles (SUVs) and its pick-up trucks and multi-utility vehicles (MUV) would be assembled there. The company, which is scouting for partners and land in the world's largest automobile market, is in advanced talks with 3-4 US-based players.

M&M would be the first Indian car company to set up a manufacturing facility of any sort in the US, where car and truck sales totalled 1.61 crore vehicles in 2007, down from 1.66 crore the year before, according to a media report. It was the worst performance since 1998 as rising gasoline prices and declining hoousing values sapped consumer confidence.

"We are setting up a plant for assembling CKD (completely knocked-down) kits of our vehicles in the US. It is premature to comment on the finer developments," Pawan Goenka, president, automotive, Mahindra Group told the Hindustan Times.

The company is looking at sites in the Midwest and Chicago areas, according to sources in the industry. Though Goenka did not elaborate further, he said that the core area for the company's automotive business would be in SUVs, pick-up trucks and multi-utility vehicles. The company is working towards building itself as a global brand in the segment, he said.

The kits would be assembled in M&M's plants in India and elsewhere before being shipped to the US. Despite stressing on a strategy to create and cater to niches in car markets, M&M is now working on a mid-range MUV for India, which is targeted at the masses, Goenka added. Most of the work on this project, whose name is yet to be announced, is being done in-house at local pricing, with an eye to keep costs strictly under control.

M&M has launched the flagship Scorpio in various markets including South Africa. Scorpio and Bolero together have grown at close to 25 per cent in the last financial year. Starting this year, the company that brought the Willy's Jeep into India will launch one product every year till the end of the decade. While the Ingenio is coming this year, the new MUV and the new SUV are scheduled for launch in the next two years.

Goenka said that though his company is looking at a broad range of products as part of their line-up, it was not looking at product ownerships in the passenger vehicle category. "We will distribute other Renault products made in Chennai," he said. The company currently sells the Renault Logan in the Indian market.