Auto majors commit Rs.11,500 cri nvestment in Maharashtra

Move follows the State’s announcement of incentives for the sector on the eve of elections.

Major automobile manufacturers have committed to invest up to Rs.11,500 crore in Maharashtra to expand their existing facilities.

While Mahindra & Mahindra (M&M) and Tata Motors, both already having a significant presence in Maharashtra, said they would invest Rs.4,000 crore each, two-wheeler major Bajaj Auto will invest Rs.2,000 crore and Volkswagen Rs.1,510 crore.

This move follows the Government of Maharashtra announcing incentives for the automobile industry on the eve of the State elections.

The incentive includes tweaking the Value Added Tax (VAT) refund from 50 per cent net VAT to 50 per cent gross VAT.

Interestingly, this measure reverts to the earlier rate, which the same government had changed in 2011. The investments come under the Industrial Mega Project Policy announced in 2005.

Since April, 2014, ten mega projects with an investment of Rs.2,702 crore with employment potential of more than 5,800 persons had been signed.

Of the four projects announced, three will be in the Pune district while Bajaj Auto’s investment will be at its unit in Waluj, Aurangabad. In all, they would result in employment opportunities for 6,270 people, Maharashtra Chief Minister Prithviraj Chavan told a press conference held here to sign the memorandum of understanding (MoUs) between the government and the companies.

Tata Motors to expand existing facilities

Tata Motors will invest to expand the existing manufacturing facilities and employ an additional 1,200 people. M&M has already invested Rs.4,000 crore in its Chakan facility employing 4,000 people.

Now, it will invest to expand the facility at Chakan and provide employment to 2,500 additional persons.

M&M’s similar plans

Speaking on the occasion, Anand Mahindra, Chairman, Mahindra Group, said, “We will raise the plant capacity from the current 320,000 units to 450,000 by 2016. At that time, we will also roll out new products from the plant. In seven years, we want to raise the capacity at the plant to 750,000 units.’’

Volkswagen will invest Rs.1,510 crore to make diesel engines and related backward integration. It will employ an additional 570 persons.

Bajaj Auto will invest Rs.1,000 crore in two phases to expand the capacity of its two-wheelers and commercial vehicles — from 22.80 lakh units to 33.60 lakh units in the first phase and further to 38.40 lakh units in the second phase. It will employ a further 2,000 people.