Mahindra Eyes to Open a 3,000 Crore Facility at Uttarakhand

Mahindra, the Indian auto major that was going to open a new facility in Maharashtra, has now shifted its way; the company is now going to open a 3,000 crore manufacturing facility at Uttarakhand. This new facility at Uttarakhand will have a capacity of producing 2.5 lakh vehicles per annum.  Mahindra is mulling to buy a 500 acre land to set up the facility, which could also house  auxiliary manufacturers around it. Mahindra & Mahindra has facility in Kandivali on the outskirts of Mumbai, Chakan off Pune and at Nasik, meaning all the facilities are in Maharashtra.

The facilities are for its four wheeler division which manufactures cars, utility vehicles and commercial vehicles.  In addition, there is an R&D facility in Chennai, called Mahindra research valley which is a pioneering facility to build new products; Mahindra is also mulling to open a new facility in Chennai as well. Mahindra India reason to shift from Maharashtra, to Uttarakhand is a disagreement the carmaker is having with the government of Maharashtra regarding the refund of VAT. The company demands that the government should refund the Vat paid on all vehicles produced in Maharashtra whereas the government is agreeing to return only the VAT Mahindra has paid for vehicles sold in Maharashtra.

This difference in stances between Mahindra and the government is cited as the major reason for the company’s decision to open facilities in other states. It’s not just Mahindra who is having troubles with the Maharashtra government, other automakers like Bajaj Auto and Volkswagen India are all on the same lines; it will be interesting to see if Maharashtra is going to lose them all.  If this happens, Maharashtra is going to lose its top slot of being a top investment destination of the country; already Gujarat has attracted a bunch of auto majors and has become the most sought after place in India for fresh investments in the auto sector. 

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