Mahindra plans to increase vehicle production in this country, including EVs

Mahindra is planning to expand its vehicle production capacity in South Africa, one of its fastest growing overseas markets. A local subsidiary of the Thar Roxx and XUV700 maker has recently inked a key deal with the country's Industrial Development Corporation (IDC) to begin a feasibility study on setting up a new facility in South Africa where its Completely Knocked Down (CKD) vehicles will be assembled in coming days. Mahindra currently sells four cars in the country, including the XUV 3XO and Scorpio pickup truck besides Scorpio-N and XUV700 SUVs.

Besides this new facility, Mahindra is also planning to increase production capacity at its existing facility located in KwaZulu-Natal province. It also plans to study the feasibility of launching its electric vehicles like the BE 6 and XEV9e among others in the country. South Africa is considering to introduce tax incentives or subsidies for consumers to boost sales of electric vehicles which could help Mahindra offer its EVs at an attractive price. Local assembly of Mahindra EVs could boost the carmaker's chance to foray into the segment for the first time in South Africa.

Mahindra has been selling cars in South Africa for the past three decades and is one of the largest Indian carmakers by sales figures. Rajesh Gupta, CEO of Mahindra South Africa, said, “Reaching the milestone of our 25,000th locally assembled Pik Up is (a) testament to Mahindra’s growing footprint and long-term commitment to South Africa. As we continue to strengthen our operations, this MoU allows us to explore the feasibility of expanding our local assembly capabilities."

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The deal will look into potential of expanding vehicle production at a local level, evaluate incentives offered to manufacturers in South Africa’s automotive industry as well as supply chain infrastructure. It will also help Mahindra study logistical feasibility, which will include its hunt for potential locations to set up a new facility. However, the carmaker said that it has not made any commitments on establishing a CKD facility so far.

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