M&M short of time for new plant

Mahindra & Mahindra is running against time for its new plant as capacity at an existing passenger vehicle making facility is fast reaching its peak.

The company which has been in talks with a few state governments, such as Tamil Nadu, says it is yet to take a call on its new plant which would entail an investment of at least Rs 4,000 crore.

Pawan Goenka, president (automotive and farm equipment sectors), said, “We were hoping to make a decision by end of April or beginning of May for the location of the new plant. According to our calculation, we would run out of capacity at Chakan by end of 2014 or beginning of 2015. We will need a new plant around that time.”

In addition to ramp-up of current models like XUV 500, the company would require to set up increased capacity to support volumes from the new line of products such as the mini Xylo and the mini Verito, which would hit markets soon. Besides, several new upgrades and refurbishments are also slated to be brought into existing models.

In the first four months of the current year, M&M posted domestic volumes increase of 27 per cent while others such as Maruti Suzuki, Hyundai and Tata Motors posted a rise of a little more than five per cent.