M&M hikes three-wheeler capacity

Electric-powered version to be produced; Mahindra Bijlee to be relaunched

Automobile major Mahindra & Mahindra is increasing its three-wheeler production capacity""for both passenger and commercial variants--to 7,000 units a month from 2,500 now.

The company executives, in the presence of Uttaranchal Chief Minister N D Tiwari and state officials, today inaugurated the new three-wheeler-making facility in Haridwar.

With the increase in capacity for producing three-wheelers, the company has also expressed renewed interest in the production of the electric-powered version of these vehicles.

The Mahindra Bijlee is expected to be re-launched in the coming months, with hopes of greater sales. Its re-launch will be under the name Champion Bijlee.

"With the central government subsidy of Rs 75,000-80,000 for every vehicle, along with reduced cost of production due to lower excise duty, increasing cost of petrol and diesel, the commercial viability of the electric vehicles has improved," said Pawan Goenka, president (automotive), M&M.

With commercial production set to rise, the production of some of the three-wheeler products will now be shifted from Zaheerabad, Andhra Pradesh.

"This does not mean production at Zaheerabad will come down. We will produce the pick-up trucks from this facility," said Anand Mahindra, vice-chairman and managing director, M&M.

Earlier, at the Asia Pacific Automotive Industry Roundtable in New Delhi, Mahindra said the company was in the process of acquiring three companies in India and two abroad.

He did not give details on the time, but did not rule out the possibility of acquisitions in Europe. "We are in talks with people in Europe," he said.

He said one of the entities being pursued overseas was a forging company.

The company is also in talks with three state governments in the country, one of which is Uttaranchal, for setting up manufacturing facilities for medium and heavy commercial vehicles.

M&M had, in November this year, signed an agreement with the International Truck & Engine Corporation for manufacturing medium and heavy commercial vehicles in India.

The new facility at Haridwar has been built with a capital cost of Rs 70 crore and an initial capacity of 30,000 three-wheelers per annum.

This is expected to go up to 50,000 units in a year's time. The company will be rolling out the Alpha (priced at Rs 1.15 lakh) and the Champion (Rs 1.90 lakh) range of three-wheelers from this facility.

Speaking at the inauguration of the Haridwar plant, Anand Mahindra, vice-chairman and managing director, M&M said the company would be happy to look at Uttaranchal as a possible destination for making four-wheelers too. He later clarified that it was only "loud thinking" at this stage. "(At this stage) I will like to leave it as vague as that," he said.

The Mahindra-Renault project is expected to start commercial production of the sedan, Logan, by mid-2007 in Nashik, Maharastra. The company plans to launch a petrol and diesel versions of the Logan in mid-2007.