After much delay, Mahindra & Mahindra (M&M) has finally confirmed its decision to invest in Tamil Nadu. The company will soon sign a memorandum of understanding (MoU) with the Tamil Nadu government in this regard, said Pawan Goenka, executive director and president (automotive and farm equipment), Mahindra & Mahindra.
Speaking to FE in Chennai on Saturday, Goenka, who was in the city to attend the eighth edition of the SAE India International Mobility Conference and first Commercial Vehicle Engineering Congress, said, ?We are in final discussions with the state?s industries department. Nearly 450 acres of land have been identified at Cheyyar, close to Chennai, with an initial investment of R2,000 crore.?
Goenka said, ?We are awaiting state cabinet approval and expect to sign the MoU in the next few days.? The company will invest in setting up a manufacturing plant to make four-wheelers. However, it will start with a testing facility with an estimated investment of R400 crore in 200 acres of land. ?We plan to manufacture utility vehicles (UVs), sports UVs and MPVs here, and consider this an important decision for us towards our major expansion initiatives,? Goenka added.
The company originally planned to invest R4,000 crore in 2011, including in the tractor segment, but decided to move the tractor facility to Zaheerabad in Andhra Pradesh to avoid time overrun. The fate of the project, which was initiated in 2011, has remained uncertain due to land allotment, he said. ?Since the MoU with the Tamil Nadu government got delayed, we had to set up the project at Zaheerabad in Andhra Pradesh. The project has already started production from the beginning of this year,? he said.
The company has invested over R300 crore in the Andhra Pradesh facility, which has a production capacity of around one lakh tractors per annum and is currently running at full capacity. This investment was supposed to come to Tamil Nadu.
M&M is now planning to set up a testing ground in phase I, which will spread over 200 acres of land. In phase II, when the company takes up the automotive expansion across the country, it will set up an automotive plant (for four-wheelers).
?The company doesn?t like to commit a high investment and then reduce it. But when we bring the full-fledged automotive plant here, it will go beyond the committed investment, since an automotive plant costs more than R2,000 crore,? said Goenka.
?Tamil Nadu is important for the company and we want to have a plant and testing facility here. The testing facility will be fairly large and very important for us, since our R&D is here. Right now, we are suffering because we don?t have a testing facility in India and we need to go to the UK, Australia or Korea to get it done,? said Goenka.
