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Mahindra signs MoU to set up new vehicle assembly plant in South Africa
South Africa is one of the fastest-growing international markets for Mahindra, and the MoU evaluates the potential for expanding local manufacturing.
Mahindra is planning to expand its vehicle production capabilities in South Africa, which has turned into one of the fastest-growing international markets for the Indian automaker. The SUV giant has signed a Memorandum of Understanding (MoU) with South Africa’s Industrial Development Corporation (IDC) to begin a feasibility study for setting up a new facility.
Mahindra to conduct feasibility study for new CKD plant
The announcement coincides with the production of its 25,000th locally assembled pickup on February 24, 2025. South Africa will play a major role in Mahindra’s international strategy, and the brand even showcased its next-generation pickup truck globally in August 2023. Mahindra presently retails four SUVs in South Africa, including the XUV 3XO, Scorpio pickup truck, Scorpio-N SUV, and the XUV700. The Mahindra SUVs are made in India and exported to South Africa, and the new CKD facility will help address the growing demand.
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Speaking about the milestone, Rajesh Gupta, CEO of Mahindra South Africa, said, “Reaching the milestone of our 25,000th locally assembled Pik Up is (a) testament to Mahindra’s growing footprint and long-term commitment to South Africa. As we continue to strengthen our operations, this MoU allows us to explore the feasibility of expanding our local assembly capabilities."
Detailed study to examine factors for local assembly
The MoU marks a significant step in evaluating the potential for expanding local manufacturing. The detailed study will examine key factors such as South Africa’s automotive industry incentives, export market potential, workforce development, and supply chain infrastructure. The study will also asses logistics and supply chain feasibility including potential locations, to determine how Mahindra can further integrate into the country’s industrial landscape, including New Energy Vehicles (NEV). This should make way for the new BE 6 and XEV 9e to be launched in South Africa. With South Africa considering introducing tax incentives or subsidies to boost EV sales, Mahindra could have an early-mover advantage in the market.
Mahindra has had a presence for three decades in South Africa. The automaker is planning to increase production capacity at its current facility in KwaZulu-Natal province. That said, the automaker has maintained that it is purely evaluating the opportunities at the moment. The company says there’s no commitment made yet towards establishing a CKD facility at this stage. The study will help the carmaker make an informed decision, Mahindra said in a statement.
