Mahindra & Mahindra, India’s largest utility vehicle maker, is planning to set up an assembly plant in Southeast Asia. It is eyeing markets in Thailand, Indonesia and Malaysia.
The new plant, which will cater to entire Southeast Asian region, is likely to come up in next couple of years and is part of the company's dream of being a global player.
“SEA markets are important, big markets for M&M’s overseas growth and for expanding our global presence. We are at present in talks with various parties and evaluating the various possibilities for setting up base with appropriate business model,” Pravin Shah, chief executive, international operations, automotive & farm equipment sectors told.
The Asian Free Trade Agreement has opened several opportunities for M&M to tap into the full trade block markets amid low and falling duty structure (0-5 percent) among member countries. “The company is exploring Indonesia, Thailand for the automotive business, and from the tractors perspective, Thailand, Malaysia and Myanmar is on the radar,” said Shah.
The Southeast Asian base is likely to offer products ranging from M&M’s utility vehicles to pick-ups, Ssangyong SUVs, Mahindra tractors, along with products from Chinese tractor joint ventures Jiangling & Yeuda Tractors.
Currently, M&M exports vehicles to Malaysia and is aiming to expand to other markets in ASEAN region. The market size for utility vehicles and pick-ups in key ASEAN markets is more than 700,000 units per annum and for tractors it is more than 55,000 units.
Over the next four to five years, M&M sees at least 15-20 percent of its total export volumes coming from this region. The company is aiming to double overseas revenues to more than $1 billion by 2013 and is aiming two-fold increase in volumes to 100,000 units, excluding Ssangyong kitty.
In the year ended March 2011, M&M exported 17,000 units of utility vehicles and pick-ups and around 11,000 tractors. So far this fiscal, its automotive exports have grown by 69 percent, while tractor exports are up 16 percent.
M&M eventually sees almost 15-20 percent of its total production from exports market. The company has an automotive assembly plant in Brazil and Egypt.