Upbeat M&M plans to build plant in South Africa

India's farm equipment and automobile major Mahindra & Mahindra plans to set up a plant in South Africa as improving market conditions boosted the company's sales in the region by 80 per cent since the beginning of last year, says a media report.

"There are many benefits in having an assembly plant in South Africa," Mahindra & Mahindra Group President Pawan Goenka told the daily 'Business Day'.

Mahindra could not provide details of where the plant would be located in South Africa and how much would be invested on it, but merely indicated that a feasibility study had been completed.

The main benefit would be an affirmation of its commitment to the local market, while sales cycles would be reduced from two months to 10 days, the report said.

"South Africa would be Mahindra's gateway to the rest of Africa," Goenka added.

Mahindra already has a strong tractor brand in Ghana, Nigeria, Gambia, Chad and Mali on the West coast of Africa.

Previously, Mahindra had not considered a local factory to be viable, but the improved local sales, though coming off a small base, as well as opportunities on the rest of the continent had prompted the decision, the report said.

Concentrating largely on the commercial vehicle market since it came to South Africa in 2004, Mahindra now want to make available its tractor offerings to South Africa as well.

Mahindra also hopes to capture 5 per cent of the market share when it launches a new range of delivery trucks next year.

Mahindra has sold 11,000 vehicles in South Africa since its entry to the market through its 40 dealers across the country.