Pune Media

M&M is scouting for land for new factory in Maharashtra

Mahindra & Mahindra, India’s number one SUV maker in terms of revenues, has set its sights on one million annual production in the coming decade and has started scouting for a fresh parcel of land to set up a new factory. 

Sources say the company is at an initial stage of looking for a new piece of land for a factory that will house its most ambitious multi-energy platform, the New Flexible Architecture (NFA). 

With the current product range—i.e. Bolero, Scorpio, Thar, XUV, and BE range—M&M has the visibility to maximise the existing capacities at Chakan, Pune, and Nashik. Both these plants have a combined capacity of about 8 lakh units. With the new product range, it will need more capacity. 

The NFA architecture is expected to produce close to a dozen models, and the combined volume potential from the new platform ranges from 3 lakh units to half a million units per annum. The existing facilities cannot accommodate more models. 

“The company would like to acquire land parcels in and around Chakan; alternatively, it is keen on locations around Shirur, Ahmednagar, about halfway between Pune and Aurangabad to ensure it remains in and around the automotive belt to retain a logistical cost advantage,” said one of the several people in the know of the development. 

The maker of Scorpio and XUV has already expanded its manufacturing capacity from 30,000 units a month in 2022 to 49,000 units at present in a short span of 24-36 months. 

The company has announced that it aims to reach 64,000 units per annum capacity by the end of the current financial year, which will further increase to 72,000 units by the end of FY26, thereby taking the overall capacity to 8.64 lakh units. 

This incremental capacity will go into its electric vehicle portfolio based on the Inglo platform. The existing factory in Chakan has also made space for its new small commercial vehicle, Urban Prosperity Platform, which will have an annual capacity of 1.2 lakh units. 

Meanwhile, M&M has also been actively looking at any potential acquisition opportunity. The company is believed to have been interested in General Motors’ Talegaon facility, which was eventually acquired by South Korean car maker Hyundai Motor India. 

If the discussion for a collaboration between Mahindra & Mahindra and Skoda Auto VW fructifies, additional capacity may also be possible through that channel. The homegrown car maker may actually utilise the European car maker’s Chakan facility. 

M&M has been on a phenomenal turnaround path since the Covid-19 years. It has been consistently outpacing the market for the last few years. 

In a slowing market, M&M has already guided for mid-to-high teens growth backed by its new launches like 3XO and Thar Roxx. If the company manages to attain its target, it will cross the half-million-unit sales milestone for the first time this financial year. 

The company’s market share is likely to reach double digits, and the SUV turnover is likely to exceed Rs 75,000 crore in FY25.  

At the end of FY24, M&M was the number two SUV maker in volume terms and the number one in revenue market share, with sales of 4.59 lakh units.

“Given the recent strong track record and the number of new models lined up by the company, it seems possible that Mahindra will be able to sustain its growth momentum despite overall softness in demand. The company is already asking for preparedness to ramp up Thar Roxx to 10,000 units a month, and XUV 700, which was slowing, has also started improving in the marketplace. It will be yet another strong year, and we are ready to supply,” added another person in the know. 

Mahindra & Mahindra has already announced an investment of over Rs 27,000 crore in the automotive business, which will be used to develop new products and capacities. However, it is unclear whether the capital allocated includes the capex needed for new land and a facility. 

The company has already guided by nine all-new ICE vehicles and seven battery electric vehicles until the end of the decade.

 



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