Mahindra considering expanding manufacturing presence in South Africa

Mahindra is set to conduct an in-depth feasibility study into the potential expansion of its manufacturing footprint in South Africa.

Deemed a significant step to potentially strengthen its presence in the country, the Indian manufacturer has signed a Memorandum of Understanding (MoU) with SA’s Industrial Development Corporation (IDC) to assess the feasibility of Completely Knocked Down (CKD) production.

Mahindra currently performs Semi Knocked Down assembly of the Scorpio Pik-Up at its KwaZulu-Natal plant operated by AIH Logistics. The facility recently produced it 25,000th bakkie.

CKD production is a far more comprehensive assembly process that typically includes a full assembly line and paint shop, thus creating far more jobs.

“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,” Mahindra said.

“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).”

However, the company reiterates that any potential manufacturing expansion is purely at the evaluation phase at this stage, and no formal commitment has been made toward establishing a CKD facility.

There is also currently no word on which vehicles could be produced locally.

Mahindra revealed a prototype of its next-generation Global Pik-Up at an event staged in South Africa in 2023, but the production version has yet to be confirmed for local assembly. Some have also mooted the idea of SA becoming a global production hub for the current Pik-Up model.

Electric vehicle manufacture remains a possibility too, given the aforementioned statement on NEVs, particularly given that the country is in the process of introducing production incentives for these vehicles.

“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 potential to create employment opportunities,” IDC project development executive Rian Coetzee said.

IOL