India’s Mahindra Outlines Expansion Plans

India’s largest utility vehicle maker Mahindra & Mahindra Ltd. will invest 5.5 billion rupees ($118.3 million) to build a new plant and increase capacity at its Nashik, India, facility from 80,000 to 150,000 units annually.

The new plant will build the Ingenio SUV, which replaces the aging Bolero, by 2008. M&M says the plant will have an initial capacity of 100,000 annually, with volume to reach 500,000 vehicles in the future.

The capacity boost at the Nashik facility, in the western state of Maharashtra, will accommodate the Ingenio and Scorpio SUVs and Logan sedan, which M&M will make beginning in 2007 in a joint venture with Renault SA.

The auto maker will invest an additional $43 million in a new engine unit at its Igatpuri plant, also in Maharashtra, that will take capacity from 450 to 800 units per day.

It also plans a new plant in 2009 that will have an annual capacity of 100,000 vehicles.

New joint ventures and acquisitions are giving M&M entry into global markets as well. The auto maker is setting up assembly plants in Russia, Europe, Egypt and Malaysia, while it is increasing exports to the Middle East, South America and South Africa. M&M is gaining a foothold in Europe through its Mahindra Europe Ltd. subsidiary.

Additionally, M&M has a JV with Navistar Inc. to produce medium- and heavy-duty trucks beginning next year. It also has acquired domestic companies that include a majority share in Plaxion Technologies (India) Ltd., in order to enter automotive design and fabrication services.

Meanwhile, Mahindra Systems and Automotive Technologies is emerging as a one-stop global component sourcing and development shop for tooling and design.

"We are looking at new acquisitions in Germany and Detroit," MSAT President Hemant Luthra says.

In January MSAT acquired U.K.-based Stokes Group Ltd.