M&M to hike Chakan investment to Rs 4,000cr

Mahindra and Mahindra (M&M) will increase investment in its Chakan manufacturing plant to Rs 4,000 crore.

The company had initially planned two plants - one standalone unit at Chakan and the second in partnership with Renault and Nissan - to increase manufacturing capacity.

The company had initially planned an investment of Rs 2,500 crore at Chakan to build a capacity of 250,000 units while an additional 200,000 units were supposed to come from the 50% stake in the Mahindra-Renault-Nissan plant in Chennai. M&M announced yesterday that it is pulling out of the Chennai plant.

The three partners had planned to jointly invest Rs 4,000 crore in the Chennai facility, which was to have a capacity of 400,000 units over the next seven-nine years.

"It makes more sense for us to make all products at Chakan rather than starting two manufacturing plants. Our initial plan required two plants but as of now the company is planning to set up the Chakan plant,"Pawan Goenka, president (automotive sector), M&M, told reporters at the 9th Auto Expo here.

He said the company intends to have an overall capacity of 320,000 units at Chakan, and might look at setting up a greenfield plant Chennai "in case further need arises."

"We expect to begin commercial production at Chakan in the next two years. Initially the plant would have a capacity of 2.5 lakh units per annum, which would be ramped up to 320,000 units as and when the need arises," Goenka said.