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HomeWHAT'S NEWINDUSTRY: Mahindra Opens Local Production Facility

INDUSTRY: Mahindra Opens Local Production Facility

Mahindra South Africa has joined the league of South African vehicle manufacturers with the opening of a state-of-the-art vehicle assembly facility in Durban, KwaZulu-Natal, as BERNIE HELLBERG JR reports.

Every local motor pundit’s worst nightmare is that the South African motor vehicle manufacturing industry should decline, and eventually follow the disastrous Australian example.
For that reason, every new investment in local manufacturing capacity should be promoted, if not downright celebrated.

Manufacturing Mahindra

Mahindra, the first Indian motor manufacturer to invest in South Africa, will assemble the complete range of Pik Up single- and double cab vehicles. Introduced to South Africa during October 2017, the new Pik Up range has since become the company’s best selling commercial vehicle, thanks to its combination of rugged and durable construction, high level of specification and affordable price.

Manufacturing Mahindra

KEY PARTNERSHIPS

The facility was constructed in partnership with AIH Logistics, a Level 2-rated BBBEE company with proven credentials in the automotive sector. It represents an initial investment of R10 million in facilities and equipment.

Furthermore, by establishing this facility, the Indian manufacturer hopes to strategically capitalise on the centuries-old relationship between South Africa and India.

“There is a special association between South Africa and India, which goes back over 150 years. Our two countries are bound by two peace icons, Mahatma Gandhi and Nelson Mandela, who shaped the world with their conviction in silent strength. Its decision to assemble in South Africa is a manifestation of the strength and vibrancy of this strategic partnership, as well as the company’s desire to deepen and diversify the special bond with South Africa”, says Ms Ruchira Kamboj, High Commissioner for India to South Africa and Lesotho.

According to Mr Rajesh Gupta, the CEO of Mahindra South Africa, the decision to assemble vehicles in Durban follows Mahindra’s exceptional growth since it first established an office here in 2004.

“The brand has grown significantly since the launch of its first models in South Africa. In the last five years alone, it has grown its market share by a compound annual growth rate of over 4.6% a year, which puts us in a league of the five fastest growing companies in the same period. Much of this growth was achieved in a declining market, which indicates our increased acceptance and popularity in the South Africa market,” says Mr Gupta.

Manufacturing Mahindra

STATE-OF-THE-ART

The assembly facility will have an annual capacity of 2,500 Pik Up vehicles on a single-shift production, its modular design easily allowing for increased production to 4,000 units per annum or the addition of any other Mahindra vehicle. The state-of-the-art of facility is equipped with very advanced quality testing equipment to ensure that this plant offers products that meet and exceed Mahindra’s strict quality standards for all locally produced vehicles.

“Our focus is on the bakkie segment, where Mahindra is now one of the six best-selling bakkie brands in South Africa. We will start with the assembly of the Mahindra Pik Up range, but this does not mean that we could not, in future, add another pickup or commercial vehicle or even one of our tractor models or heavy-duty power generator systems to the assembly line,” says Mr Avinash Bapat, CFO of Mahindra South Africa.

The new assembly facility started trial production in May 2018 and will enter full production in July 2018. In this phase, it will employ 25 full-time staff working on one shift. The local assembly staff complement was trained in partnership between the global Mahindra & Mahindra Group and AIH Logistics.

LOCAL SOURCING FOR MAHINDRA

Mahindra South Africa already supports other African countries in the Southern African Customs Union, and it aims to grow its reach throughout sub-Saharan Africa, using this facility and South Africa as a base.

Mr Arvind Mathew, Chief of International Operations for Mahindra & Mahindra, explains the significance of this new facility: “Mahindra has always seen South Africa as a ‘second home’ and a base from which it could grow its market share on the continent. We believe that our investment in an ultra-modern assembly facility and our intention to localise part-sourcing over time reaffirm this view.”

It has set its sights on sourcing 40% of the components, measured by value, of its Pik Up range from local component suppliers. It has already started with this project and will announce more details soon.

Report by MAHINDRA / BERNIE HELLBERG JR | Images © MAHINDRA SOUTH AFRICA

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