Mumbai: Top utility vehicle maker, Mahindra & Mahindra Ltd, said on Wednesday it would invest $118.3 million in a new auto facility and to increase capacity at its plant in Maharashtra.
The facility, to make Ingenio utility vehicles, will begin production by 2008. It will take production capacity at its factory in Nashik, where it already has a plant, to 150,000 units a year from about 80,000 units.
The added capacity will be divided nearly equally between the Ingenio, the Scorpio sport utility and the Logan sedan, which Mahindra will make from 2007 in a joint venture with France's Renault.
"Our capacity is just enough for our requirements right now," said Pawan Goenka, president of Mahindra's automotive unit. "The new capacities will take care of demand till 2009," he said.
Mahindra, which in March said it would increase capacity at the Nashik plant by 73 per cent, has said it would build a new auto plant in 2009. Goenka said the new plant would likely have an initial capacity of 100,000 units per year, and rising up to 500,000 units eventually.
“A 100,000-unit capacity plant will require an investment of Rs 10 billion,” he said.
Shares in Mahindra rose as much as 4 per cent on the news in a firm market. They were up 3.5 per cent at Rs 642. Mahindra also said it would invest $43 million in a new engine unit and testing facilities in Igatpuri, also in Maharashtra.
Capacity at this plant will rise to 800 units per day from 450. Mahindra also has a joint venture with Navistar Inc. to make medium and heavy trucks, from 2007.
Goenka said the company is working on bio-diesel and other alternative fuels as oil prices continue to climb.
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