Mumbai: After its pullout from the tripartite joint venture with Renault and Nissan to set up a manufacturing plant in Chennai, homegrown auto major Mahindra & Mahindra today said it will invest an additional Rs1,500 crore in its Chakan unit, near Pune in Maharashtra.
The company has signed an MoU with Maharashtra government to invest an additional Rs1,500 crore to the already earmarked Rs2,500 crore in the Chakan manufacturing plant, M&M informed the Bombay Stock Exchange.
A total sum of Rs4,000 crore would be utilised towards the development and production of vehicles slated to be rolled out from the proposed Chakan greenfield plant, it added.
“M&M’s new investment at the upcoming Chakan facility, besides contributing to the state’s economic growth will also produce jobs for the locals in that region. This project is in keeping with this tradition of mutual growth,” Mahindra Group Chairman Keshub Mahindra said.
M&M’s Chakan unit will manufacture medium and heavy commercial vehicles, to be produced by joint venture firm Mahindra International and other products slated to hit both the domestic and global markets at strategic timelines, the company said.
M&M had initially planned an investment of Rs2,500 crore at Chakan to build a capacity of 2,50,000 units.
In January, M&M President (automotive sector) Pawan Goenka had said the company intends to have an overall capacity of 3,20,000 units at Chakan, and might look at setting up a greenfield plant Chennai, “in case further need arises”.
”We expect to begin commercial production at Chakan in the next two years. Initially, the plant would have a capacity of 2.5 lakh units per annum, which would be ramped up to 3,20,000 units as and when the need arises,“ Goenka had said.
Earlier in January this year, M&M had pulled out of the tripartite JV for setting up a Rs4000-crore greenfield manufacturing unit at Chennai for production of 400,000 units of cars and utility vehicles along with power trains. The company had cited lack of synergy in product planning for the pull-out.
Shares of Mahindra and Mahindra were trading at Rs690, down 0.16% on the BSE.