Pawan Goenka, M&Ms ED & president (automotive, farm equipment & two-wheeler), told FE that the company has kept the announcement on hold till after the polls as the state cannot make an investment announcement because of the election commission's model code of conduct.
We are close to finalising the deal and will make the announcement around June. We will invest R4,000 crore over 7-8 years for our new line of products, which will be launched 2015 onwards, Goenka said, without confirming the location of the plant.
The plant is part of the R10,000-crore investment announced by M&M over the next three years towards capacity expansion and new product development.
M&M is reportedly in the process of signing an MoU with the Tamil Nadu government for the new plant, which is expected to be spread over 400 acres at Cheyyar in southern Tamil Nadu. New products likely to be made at the facility include a compact suv (S101), a new mid-size SUV (U301), a global MPV (W202) and a new LCV (P601) to replace the Maxximo. In fact, M&M has already invested R600 crore in an R&D facility near Chennai called Mahindra Research Valley, which has about 2,500 people.
Gaurav Vangaal, automotive analyst for light vehicle forecasting at IHS, said, Looking at the growth outlook for Mahindra in the next 3-5 years and the new product portfolio, they require additional lines or capacity. This is the right time to add capacity.
The R40,441-crore (revenue in FY13) M&M currently has automotive (non-tractor) plants in Mumbai, Chakan (near Pune), Haridwar, Nashik, Pithampur (two- wheelers) and Zaheerabad.
The M&M scrip closed at R975.35, down 0.81%, on the BSE on Wednesday.