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Mahindra & Mahindra (M&M) is looking to roll out its own utility vehicle (UV) range in Russia with plans for local assembly in about 18 months.
The company is in talks with Solaris, the Russian distributor for recently acquired Korean firm SsangYong, to utilise the existing capacities at Solaris' three car assembly units. With minimal incremental investment, the existing plants could assemble both Mahindra and SsangYong models.
“We're deciding the time line and what (Mahindra) products to take there. We're quite excited about the Russia potential, the market for UVs is much bigger there and it is already the second most important market for SsangYong after Korea,” Dr Pawan Goenka, President of M&M's Automotive and Farm Equipment Sectors, said.
Doubling Capex
While plans for a US entry of Mahindra car models is still hung on a legal tussle with an erstwhile partner, the company is considering a bigger play in markets such as Korea, Brazil and Chile.
Faced with high demand at home and strong potentials in export markets, M&M is more than doubling its expenditure plans till 2013-14. About Rs 5,000 crore is to be spent on capital expenditure, while Rs 2,000 crore has been kept aside for various investments.
With total vehicle capacity doubling to five lakh units by 2015, an additional Rs 3,000-4,000 crore is likely to be spent on the second phase of expansion at its Chakan facility.
However, this may be at risk if the Maharashtra Government does not clarify its stand on the future of the VAT refund programme (for vehicles sold out of the State).
A sop for manufacturers investing in the State, it had been taken away last February.
BID FOR SAAB
Asked if M&M will bid for troubled Swedish carmaker, SAAB, Dr Goenka refused to comment.
However, he added, “Investment on any new acquisition that may come up will be above this Rs 2,000 crore number and is likely to be financed though both internal accruals and borrowings.”
For SsangYong, Rs 100 crore is being invested in a new body shop at Chakan. The Rexton premium SUV will be assembled here and be launched by the January-March, 2013.
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