Mahindra to Explore Increased Auto Production in South Africa

Johannesburg, Feb 26 (PTI) Indian automobile giant Mahindra has signed a Memorandum of Understanding with the Industrial Development Corporation (IDC) to undertake an in-depth feasibility study on the potential establishment of a Completely Knocked Down (CKD) vehicle assembly facility in the country.

Mahindra South Africa, the local subsidiary of the Indian company, is also in the process of increasing its production capacity at its assembly facility operated by AIH Logistics in KwaZulu-Natal province as it enters a third decade in the country, which it often refers to as “Mahindra's second home”.

“Reaching the milestone of our 25,000th locally assembled Pik Up is (a) testament to Mahindra's growing footprint and long-term commitment to South Africa," said Rajesh Gupta, CEO of Mahindra South Africa.

"As we continue to strengthen our operations, this MoU allows us to explore the feasibility of expanding our local assembly capabilities. This study will provide valuable insights into the potential for deeper integration into South Africa's automotive landscape while supporting the country's industrial growth objectives,” Gupta added.

Mahindra has become the fastest-growing brand in the country in recent years with sales of its vehicles tailor-made for the local market, especially its pickup, which beat more established Japanese and European brands.

The MoU marks a significant step in evaluating the potential for expanded local manufacturing, with a detailed study set to examine key factors such as South Africa's automotive industry incentives, export market potential, workforce development, and supply chain infrastructure.

Additionally, the study will assess logistics and supply chain feasibility, including potential locations, to determine how Mahindra can further integrate into the country's industrial landscape, including New Energy Vehicles (NEV).

The partners emphasised that though the MoU signals Mahindra's intent to explore local manufacturing opportunities, it is purely an evaluation at this stage, and no commitment has been made toward establishing a CKD facility yet.

The study will allow Mahindra South Africa and IDC to make an informed assessment before any future decisions are taken.

Acting Divisional Executive for Industry Planning and Project Development at the IDC Rian Coetzee said Mahindra's commitment to the feasibility study aligns with the objectives of the South African Automotive Master Plan (SAAM) 2035, which aims to strengthen the competitiveness of the country as an automotive assembly location.

“Depending on the outcome of the feasibility study, there is great potential for the company to increase its production output in South Africa – a factor that has the potential to create employment opportunities,” said Coetzee.