Auto and tractor major Mahindra & Mahindra (M&M) proposes to invest Rs 1,000 crore in the next three years in product development, improvement of existing models and development of new models.
Part of the money will be invested in developing the company's proposed all new Scorpio, a hard-top, four-door vehicle.
This is slated to hit the roads in the year 2000. M&M will also invest Rs 100 crore in an all new R&D facility near Thane to introduce several newer versions of its existing utility vehicles and tractors.
The funds would come partly from internal generation, and partly through rupee debt, Bharat Doshi executive director of the company told Business Standard. M&M has dropped plans to raise $100 million in foreign debt and intends to tap the domestic market.
"We examined the option and decided to wait and watch. Looking at today's scenario we are right not to rush into it,'' Doshi said. ``We will probably go in for rupee borrowing,'' he added.
The development of a small M&M utility vehicle had been on the cards for quite some time now, and the company's in-house R&D team had been working on the project during the last two years.
Anand Mahindra, managing director had described the project as a scunk project, one which starts off with a small budget and is run independently by a project team. The team does not have a specific model in mind, but which comes up with one after a lot of tinkering.
M&M has been the only automobile company to buck the recession that has the domestic auto industry in a bind today. "Even in 1992, when the markets had been bad, we were the ones to grow,'' Doshi said. The reasons for M&M's success has been its focus on the agricultural market, and its reputation for providing value for money, he said.
``We have had 10 good monsoons, and besides the rural spending habits too are fast changing, Doshi added. "Even small farmers today aspire for a tractor,'' he said. "Our BPR exercises too goes towards reinforcing our bottomlines,'' he said.
In the LCV segment too the company has been able to show a growth, albeit small in sales, at a time when the other major players have been witnessing a rapidly plunging sales graph.
``This is because we have small volumes, and besides our LCVs are mostly used for passenger application,'' Doshi said.
