Mahindra to set up plant near Chennai

Decision comes weeks after the company pulls out of a joint venture with Renault and Nissan for a facility there.

Weeks after opting out of a proposed joint venture with Renault and Nissan Motor for a manufacturing facility at Chennai, utility vehicle maker Mahindra & Mahindra has decided to set up its own plant near the south Indian city.

M&M pulled out of the deal earlier this year and subsequently announced it was setting up a greenfield plant at Chakan, near Pune, with an estimated investment of Rs 1,500 crore, to produce 300,000 vehicles.

Commercial production at Chakan is expected to start in two years, about the same time Renault and Nissan will launch production at the Chennai unit.

Pawan Goenka, president (automotive sector), M&M, told Business Standard that the company is committed to invest in the south, where a new plant will be set up near Chennai. He said company executives were in talks with the Tamil Nadu government on the deal. Plans for the Chennai plant are being finalised and work is likely to begin in 2010.

“We have several business interests in Chennai. Mahindra as a group is very interested in Tamil Nadu. We want to look at Tamil Nadu for the next major expansion of our automotive business,” Goenka said.