M&M to set up commercial vehicle unit in Maha

MUMBAI, JAN 16 '07: Mahindra & Mahindra will set up a world class plant in Maharashtra to manufacture commercial trucks through its joint venture with US-based truck major International Truck and Engine Corp. This JV will produce medium & heavy commercial vehicles which would be designed and developed with in-house capabilities.

The Greenfield plant will also produce new generation of M&M vehicles that will principally be used for commercial purposes including manufacturing of engines, transmission and other aggregates for the vehicles.

A memorandum of understanding to the effect was signed today by Mr. V. K. Jairath, Secretary (Industries), Government of Maharashtra and Dr. Pawan Goenka, President- Automotive Sector, M&M, in the presence of the Hon. Chief Minister of Maharashtra, Mr. Vilasrao Deshmukh, Minister of Industry, Mr. Ashok Chavan, Chairman of the Mahindra Group Mr. Keshub Mahindra, Director of Mahindra International Mr. John Lamoureux, M&M Vice Chairman & Managing Director Mr. Anand Mahindra and the Counsel General of US Mr. Michael Owen and other officials.

Production is expected to commence in two years. The initial plant capacity of 2,50,000 vehicles per annum. The factory will have the capacity to produce a wide range of commercial vehicles, and will include cab assembly, vehicle assembly, and a paint shop. The vehicles will have 90 percent local content from the start due to the strong availability of quality parts and materials from Indian suppliers.

Speaking on the occasion, Shri. Vilasrao Deshmukh said, "I am extremely pleased to announce that the state is taking its enduring relationship with Mahindra & Mahindra forward with this world class facility. It is one more step in the development of Maharashtra as India's prime automotive hub."

Commenting on the project, Mr. Keshub Mahindra said, "The Mahindras have always partnered the state in its growth story. Our plants have made their presence felt both in contributing to the economy of the regions they are in and in terms of creating jobs for locals. This latest project is in keeping with this tradition of mutual growth."

Mr. Anand Mahindra said, "M&M's state of the art facility which would be located in Maharashtra, is of strategic value in our plans to expand our product spectrum to commercial vehicles and feed our aspirations to be a global player. The ITEC joint venture is a significant step in our evolution as an integrated player in the global automotive market."

Dr. Pawan Goenka, President, Automotive Sector - M&M said, "We have decided to make the state the launch pad for our commercial vehicles. The project is a milestone for the Mahindras and our partners as it marks our entry into a very important automotive segment. We are confident that Maharashtra with its wide and talented pool of skilled manpower, quality infrastructure and a mature supplier base will set a new benchmark for automotive manufacturing anywhere in the world."

Welcoming the decision to set up the manufacturing base in Maharashtra, Mr. John Lamoureux said, "The new facility would be key to our global expansion that we wish to achieve by partnering with Mahindra & Mahindra. I believe the new world class facility will help leverage Mahindra's synergies with the state to realise the full potential of our strategy."

Reiterating the state's commitment to the automotive industry, Mr. Ashok Chavan said, "Maharashtra has always been at the forefront in industrial development and have provided superior infrastructure to companies especially in the automotive sector. We extend that promise to Mahindra and ITEC's maiden foray into the commercial truck segment while assuring the project government's full support."

Mahindra & Mahindra and International Truck and Engine Corporation announced the joint venture in 2006. The JV will produce the new range of commercial trucks and buses. The venture will leverage Mahindra & Mahindra's extensive distribution network to rapidly launch a full range of medium and heavy commercial vehicles based, in part, on International's existing product line and adapted for the Indian market. The venture is also expected to export vehicles through its own distribution channel, as well as International's and M&M's overseas networks.

International Truck & Engine Corporation is the North American market leader in commercial vehicles of 8 tonne GVW and above, with sales of approximately 100,000 vehicles per year. International is also a world-wide leader in diesel engines in the 160-325 HP range, with production of over 400,000 engines per year.

For International, entering the Indian market constitutes a major step in its global growth. ITEC is also looking at competitive sourcing and engineering using a well developed and quality oriented supply base.

About Navistar International Corporation

Navistar International Corporation (NYSE: NAV) is the parent company of International Truck and Engine Corporation. The company through its affiliates produces InternationalÒ brand commercial trucks, mid-range diesel engines and IC brand school buses and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. A wholly owned subsidiary offers financing services. Additional information is available at www.nav-international.com.

About The Mahindra Group

The US $3.8 billion* Mahindra Group is among the top 10 industrial houses in India. Mahindra & Mahindra is the only Indian company among the top five tractor manufacturers in the world and is the market leader in multi-utility vehicles in India. The Group has a leading presence in key sectors of the Indian economy, including trade and financial services (Mahindra Intertrade, Mahindra & Mahindra Financial Services Ltd.), automotive components, information technology & telecom (Tech Mahindra, Bristlecone), and infrastructure development (Mahindra GESCO, Mahindra Holidays & Resorts India Ltd., Mahindra World City).

With over 60 years of manufacturing experience, the Mahindra Group has built a strong base in technology, engineering, marketing and distribution. The Group employs over 30,000 people and has several state-of-the-art facilities in India and overseas. The Mahindra Group has ambitious global aspirations and has a presence in five continents. Mahindra products are today available in every continent except Antarctica. M&M has one tractor manufacturing plant in China and three assembly plants in the United States.

It has made strategic acquisitions across the globe including Stokes Group (UK) and Jeco Holding AG (Germany). Its global subsidiaries include Mahindra Europe Srl. based in Italy, Mahindra USA Inc. and Mahindra South Africa. M&M has entered into partnerships with international companies like Renault SA, France, and International Truck and Engine Corporation, USA. Forbes has ranked the Mahindra Group in its Top 200 list of the World's Most Reputable Companies and in the Top 10 list of Most Reputable Indian companies.