M&M may set up manufacturing facilities in Indonesia
By Our Corporate Bureau | 24 Feb 2004
Mahindra & Mahindra (M&M) is exploring the possibility of setting up an assembly line for its utility vehicles in Indonesia. Indonesia has been identified as a key market in East Asia in terms of size and future growth prospects.
The company is in the process of identifying the important markets for its utility vehicles Scorpio and Bolero.
Speaking to the press on the sidelines of the Third Asia Pacific Executive Forum, Anand Mahindra said M&M had so far identified Indonesia, China, South Africa and Russia, as the markets for its products. He said this was because, "These markets are similar to India and apart from Indonesia, vehicles can be assembled in these countries too. More than 80 per cent of the passenger vehicles sold in Indonesia were sports utility vehicles, so Indonesia remains our immediate thrust area," he said.
Last month Mahindra had also announced plans of setting up a manufacturing base in Brazil which would be used for the production of passenger vehicles and tractors. The company has already made an entry into the European market with its Scorpio sports utility vehicle and Balero.
M&M's entry into Europe has been with a tie-up with Peugeot of France who will supply engines and with Eurasia Motors of Italy for assembly and distribution of the Bolero GLX, Scorpio and its single and double cab pick-up trucks.
The other countries M&M plans to enter are Italy, Spain, the former Yugoslavian countries, France and UK and it is currently working on upgrading its manufacturing facilities to manufacture Euro-III (E-111) emission norms compliant vehicles for the European markets.
After the upgradation is complete, the company will ship the vehicles in semi-knocked down condition without the engine, which would be sourced from Peugeot and fitted in Italy by assembler, Eurasia, according to the tripartite agreement, after which the vehicles will be sold under the Mahindra brand name but without the model being branded as Bolero or Scorpio.
The company has carried out European homologations for the Bolero, pick-up trucks and the Scorpio petrol, which already meets E-III norms at end of July last year. Already about 100 vehicles of the three models have been sent to Italy. By March 2004 M&M plans to enter the UK market with Bolero and pick-up trucks and the homologation would not be difficult as UK is a right hand drive market like India.
