Mahindra to invest 4,000 crore on Chakan plant expansion

Auto major Mahindra & Mahindra will invest Rs. 4,000 crore over a 7-year period to double the production capacity of its facility at Chakan in Maharashtra to 7.5 lakh units annually.

The company, which had earlier put on hold the expansion at the plant and considered other options citing lack of support from the Maharashtra government, said the fresh infusion would take its total investment in Chakan to Rs. 8,000 crore.

“This investment will be for doubling our production capacity at the Chakan plant to 7.5 lakh units annually,” Mahindra & Mahindra executive director Pawan Goenka told

PTI .

He said the investment is part of the Rs. 10,000 crore investment over a three-year period that the company had announced last year.

“We will manufacture two out of the three new platforms which we have also announced at the Chakan plant,” Mr. Goenka said.

Mahindra & Mahindra said a total of Rs. 4,000 crore will be utilised towards infrastructure development, product development and capacity expansion for vehicles to be rolled out from the Chakan plant.

A joint declaration was signed on Thursday between the company and Maharashtra Government, in the presence of state Chief Minister Prithviraj Chavan.

Mahindra Group Chairman Anand Mahindra said Maharashtra government’s visionary industrial policies and efficient governance practices have prompted the company to to take the decision to scale up the Chakan plant.

Earlier, the company had decided to put on hold all investment at its Chakan plant due to VAT refund issues with Maharashtra Government.

The plant currently manufacture M&M’s entire medium and heavy commercial vehicle range, including the 0.75 tonne Maxximo, Single and Double Cab Pik-Ups and the whole new range of Mahindra Trucks and SUV XUV 500 besides assembling SsangYong Rexton.

Besides Chakan, the company also has manufacturing plants at Nashik and Haridwar.

Last year, Mahindra had announced to invest Rs. 10,000 crore in the next three years on capex and launching new products. As part of overall capex, the company is developing two-three new platforms for brand new products which will hit the market around FY 2016.

The company is also working on six new engines out of which three will be from Mahindra and Mahindra and three from Sangyong. Mahindra and Mahindra is also working on smaller engines with higher power.