(Bloomberg) -- Mahindra Group, the $18 billion Indian conglomerate with businesses from the country's largest SUV maker to farm equipment to financial services, is looking to set up a car plant abroad as it builds up operations beyond its increasingly competitive home market.
“As part of our globalization strategy, we feel that we should have a base outside India,” said Pravin Shah, head of automotive operations at the flagship Mahindra & Mahindra Ltd. tractor and sport utility vehicle division, said Wednesday. A team is working on the potential overseas location and will finalize it shortly, he said at a briefing in Mumbai, without elaborating on the plan or its time frame.
India is attracting vehicle manufacturers from abroad as demand is set to accelerate amid annual economic growth of about 7 percent, even after snags caused by a sudden cash switchover in late 2016. French carmaker PSA Group outlined plans in January to set up a joint venture with local partner C.K. Birla Group, while Mumbai-based Tata Motors Ltd. and German manufacturer Volkswagen AG are said to be in talks to collaborate.
Mahindra & Mahindra's growth strategy overseas has so far focused on acquisitions, including South Korean SUV manufacturer Ssangyong in 2011, Italian design and engineering company Pininfarina in 2015 and a minority stake in Finnish farm-equipment maker Sampo Rosenlew in 2016.
The Indian company has spent about 120 billion rupees ($1.8 billion) developing its 14 plants across the country that now have capacity to make 1 million passenger and farm vehicles, Mahindra & Mahindra Managing Director Pawan Goenka said Wednesday. No fresh investments are required, he said. Group acquisitions since the financial year through March 2008 have totaled $900 million, he said.
To contact the reporter on this story: P R Sanjai in Mumbai at psanjai@bloomberg.net.
To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Tom Lavell, Dalia Fahmy
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