Despite the general slowing in consumer demand, Mahindra & Mahindra, the country’s biggest utility vehicle and tractor maker, has prepared a series of investment plans, including new factories and models, for three years.
M&M plans to spend Rs 5,000 crore as investment towards expansion and new product development over the financial years 2013, 2014 and 2015. Expansion plans include the next phase of plant augmentation at its Chakan unit, near Pune.
The company has held talks with state governments for setting up a new factory with an investment of Rs 3,000-4,000 crore. It is hastening the pace of decisions on this because of increased demand for most of its products. This investment was originally supposed to happen at Chakan but that was hit, with the Maharashtra government not conceding to automobile makers’ demand to withdraw a legal change under which set-offs on value-added tax (VAT) would be limited to vehicles sold within the state.
Pawan Goenka, president (automotive sector) at M&M, said, “We are in our final decision making process as to where we will locate our next plant and we are talking to several states. We will decide very soon.” The company expects to finalise plans on the new unit in the next two to three months.
Further, Rs 2,500 crore is earmarked for capital expenditure and merger and acquisitions opportunities for these three years.