Mahindra Partners with IDC to assess viability of a CKD facility in South Africa

Mahindra & Mahindra has announced plans to conduct a feasibility study on setting up a completely knocked down (CKD) vehicle assembly facility in South Africa. The company signed a Memorandum of Understanding (MoU) with South Africa’s Industrial Development Corporation (IDC) to assess the viability of such a plant.

The feasibility study will delve into several crucial aspects, including South Africa’s automotive industry incentives, export market opportunities, workforce development, and supply chain infrastructure. Additionally, Mahindra will evaluate logistics and supply chain feasibility, potential locations, and the scope for integrating New Energy Vehicles (NEV) into the country’s industrial landscape. The study aims to determine how Mahindra can leverage local resources to optimize operations and enhance its market competitiveness in the region.

Mahindra emphasised that the MoU is strictly an evaluation process with no firm commitment yet toward establishing a CKD facility. “While this MoU signals Mahindra’s intent to explore local manufacturing opportunities, it is purely an evaluation. No commitment has been made toward establishing a CKD facility at this stage," the company stated. The study will enable Mahindra South Africa and IDC to make an informed assessment of the business case before moving forward with any potential investment.

Mahindra South Africa is already expanding its production capacity at its existing assembly facility operated by AIH Logistics in KwaZulu-Natal. This move further strengthens the company’s long-term presence in the South African market. The expansion reflects Mahindra’s confidence in the region’s potential and growing demand for robust and reliable vehicles.

The announcement coincides with Mahindra South Africa achieving a significant milestone—the production of its 25,000th locally assembled Pik Up on February 24, 2025. This comes after Mahindra unveiled its next-generation Pik Up in South Africa in August 2023, highlighting the country's strategic importance in the automaker’s global expansion plans. Pik Up’s success underscores Mahindra’s steady growth in the market, which is backed by strong local demand and increasing consumer preference for its vehicles.

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By collaborating with the IDC, Mahindra aims to make an informed decision on local manufacturing, potentially positioning South Africa as a key hub for its automotive operations. If the feasibility study yields positive results, this initiative could pave the way for increased job creation, skill development, and a stronger automotive manufacturing ecosystem in South Africa.

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