Auto major Mahindra and Mahindra has signed a memorandum of understanding for a plant at Nasik for its new product Ingenio.(See: M&M to set up Rs550 crore plant for new MPV Ingenio) It has also drawn up some large investment plans for Maharashtra.
Pawan Goenka, president, M&M, says that this is a part of the company's strategy to hike cumulative capacity to 3.5 lakh units by 2009.
"With this we will reach overall capacity of 900-1,000 vehicles a day, which gives us 2.5 to 3 lakh capacity in a year between our Nasik, Zahirabad, Kandivali and our Haridwar plant," he says.
The company is also hiking its capacity of its engine manufacturing plant at Igatpuri. Goenka says that they need engine capacity to go with the vehicle manufacturing to 800 engines per day. CNBC-TV18 share with domain-b its exclusive interview with Goenka:
This is a part of your strategy of hiking cumulative capacity to 3.5 lakh units by 2009?
Yes, this is a part of that. With this we will reach an overall capacity of 900-1000 vehicles a day, which gives us 2.5 to 3 lakh capacity in a year between our Nasik, Zahirabad, Kandivali and our Haridwar plant.
You have also mentioned that this new plant will take care of your production capacity till FY09 beyond that you will have to set-up a new plant. Could you throw some light on how big will that plant be?
The next plant that we look at will be at larger scale than any of our listing plants. Obviously, it will take several years before the plant reaches full capacity. But we will be looking at a capacity up to 400-500-1,000 vehicles on that plant. So it is fairly large plant. But we have not made any definite decision on it yet. We are still talking to the state government. We are looking at internal requirements before we make any decisions.
For a plant of that size what kind of investment would it entail roughly?
I would think that for a plant of about one-one-and-a-half lakh vehicles, the investment will be of Rs1,000 crore. So we have not yet decided on the exact overall size and capacity of that plant.
You are also hiking capacity in your engine manufacturing plant at Igatpuri?
That is correct. To go with the vehicle manufacturing, we do need engine capacity. Today we have about 450 engines per day in Igatpuri, which we are hiking to 800 engines per day. For that we are investing Rs200 crore in Igatpuri.
With that expansion would you also look at supplying engines to other manufactures?
Yes, we have looked at it. But right now our capacity is just sufficient for our own requirements. Therefore, we are not looking at it aggressively. If we have much larger plant in future then we could look at that possibility. Right now we are focused on our own requirements.
The new vehicle, which you look at in FY09 or later, will that be under the utility vehicle range or would that be in some other segment?
This is what we call MPV, which is not quite a SUV.
You are talking about Ingenio?
Yes, beyond that I cannot talk. It's too early.