Our Capacity Expansion Is Not Contingent With Acquiring New Plants, Says M&M MD Anish Shah

Mahindra & Mahindra Group Managing Director & CEO, Anish Shah, in a recent interview with a media publication shared insights about the status of expanding its production capacity by acquiring facilities of General Motors’ Pune plant and Ford India’s Chennai plant. Shah said that its current manufacturing plant in Chakan, Pune can be easily expanded with more production lines to accommodate the high demands for its Mahindra Thar, Mahindra XUV700, and Mahindra Scorpio-N, and acquiring new plants is not vital for the company at present. However, Shah added that the company will acquire newer plants only to establish a complete supply chain. 

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Shah said, “We continue to be in talks with them (General Motors) as well as look at other options. For us, capacity creation is not as much about the plant. Our Chakan plant can expand and put in more lines, but it is about getting the entire supply base ready to be able to generate a lot more capacity for us. We are not looking at a 20-30 per cent capacity increase, we are looking at far greater than that.”

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He added, “However, plans are undergoing now, and we will share it publicly once the uncertainties are taken out. It must be done in conjunction with all the suppliers because they must procure resources, and components to put into the extra production lines.”

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At present, Mahindra builds its range of passenger vehicles from its manufacturing plants in Chakan, Zaheerabad, and Haridwar, operating at 100 per cent capacity even though the company struggles to meet the demand for its SUVs. The story of long waiting periods started from the Mahindra Thar when it was launched in 2019. The XUV700 received an overwhelming response too, with waiting periods being over a year in the initial months. The newly launched Mahindra Scorpio-N though, beat every SUV in India, by gathering over 1 lakh bookings within the first 30 minutes. At present, Mahindra has close to a quarter of a million open bookings. 

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Recently, Ford sold its Sanand plant to Tata Motors for Rs. 725.70 crore, and should Mahindra acquire the plant from GM, it would be the second instance of an Indian manufacturer taking over a facility from an American automaker in the country. The plant could be sold for around Rs. 600 crore, making it a cost-effective deal, and Mahindra may even consider turning this facility into an EV manufacturing unit as it aims to sell 2 lakh EVs a year by 2027.