M&M defers investment in Chennai plant

Renault & Nissan maintain their plans for the greenfield plant in Chennai

January 8, 2008, Mumbai: In February 2007, Mahindra & Mahindra, Renault & Nissan announced their intent to set up a joint manufacturing facility at Oragadam, outside Chennai and signed an MOU with the Government of Tamil Nadu.

M&M has since reviewed its plans, while Renault and Nissan continue to be fully committed to their industrial development plans:

M&M will utilise capacity available at their new plant in Chakan and other existing plants to meet its medium term requirements and hence shall not participate in the joint plant at Oragadam.

Mahindra shall continue its Mahindra Research Valley (MRV) at Chengelpet and MRV test track and tractor plant plans in Oragadam.

It shall simultaneously evaluate a new automotive plant at Oragadam to further enhance its capacity. The Chakan plant owned by Mahindra will manufacture Mahindra as well as Mahindra international truck products.

Renault and Nissan maintain their development plans for the creation of a new industrial plant in Chennai. They maintain their long term commitment to India, with local development including design, engineering, component outsourcing, manufacturing, etc.

Nevertheless, Mahindra and Renault appreciate their ongoing partnership and continue to have a strong relationship through their existing joint venture Mahindra Renault Pvt. Ltd. (MRPL) that has launched the Logan in India. As of Dec 31, the Logan has captured an 11% market share in the C segment since the launch in May, thus becoming third in the segment.

The new products that will be manufactured by Renault at its Chennai plant are planned to be marketed by MRPL under the Mahindra Renault brand to be sold through the M&M sales channel.

About The Mahindra Group

The US $6 billion Mahindra Group is among the top 10 industrial houses in India. Mahindra & Mahindra is the only Indian company among the top tractor brands in the world. Mahindra's Farm Equipment Sector has recently won the Japan Quality Medal, the only tractor company worldwide to be bestowed this honour. It also holds the distinction of being the only tractor company worldwide to win the Deming Prize. Mahindra is the market leader in multi-utility vehicles in India. It made a milestone entry into the passenger car segment with the Logan.

The Group has a leading presence in key sectors of the Indian economy, including the financial services, trade and logistics, automotive components, information technology, and infrastructure development.

With over 62 years of manufacturing experience, the Mahindra Group has built a strong base in technology, engineering, marketing and distribution which are key to its evolution as a customer-centric organization. The Group employs over 50,000 people and has several state-of-the-art facilities in India and overseas.

The Mahindra Group has ambitious global aspirations and has a presence on five continents. Mahindra products are today available on every continent except Antarctica. M&M has one tractor manufacturing plant in China, three assembly plants in the United States and one at Brisbane, Australia. It has made strategic acquisitions across the globe including Stokes Forgings (UK),

Jeco Holding AG (Germany) and Schoneweiss & Co GmbH (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. Mahindra has recently been honoured with the Bombay Chamber Good Corporate Citizen Award for 2006-07.