M&M might establish a new plant outside Maharashtra

The well known MUV maker, Mahindra and Mahindra mentioned on Friday that it is actually seeking an alternative place, perhaps outside Maharashtra to establish its new manufacturing unit, which would be done with an investment of a whopping Rs. 3000 to Rs. 4000 crore. The main reason behind the plan to open up a manufacturing plant outside Maharashtra is that the state government who denied the car maker’s demands to take out an adjustment under which leaves on the VAT limited to the vehicles being sold within the state. Earlier, Mahindra & Mahindra was planning to start up their new plant at Chakan, Pune. The stern modification in the VAT rules, which was announced in 2011, had put this auto major in jeopardy. The auto makers opposed these modifications in VAT as they sold merely 10 to 15% of their vehicles in Maharashtra. The main auto majors in Maharashtra comprise of Mercedes, Tata Motors, Piaggio, Bajaj Auto and Volkswagen.

On a prospect, M&M is currently searching for a substitute site for its new manufacturing unit outside Maharashtra. The president of the M&M’s automotive and farm equipment sectors, Mr. Pawan Goenka stated that the company is still looking for options and nothing has been decided as yet. He also expressed his dissatisfaction towards the government that it didn’t react on their appeal. On the other hand, Volkswagen India, which has already invested a massive Rs. 4000 crore in its Maharashtra plant that would make Skoda, Audi and VW cars; has made it crystal clear that future investments will depend on a positive conclusion on this matter. VW first established its plant with a basic capacity of producing 110000 units per year at Chakan. Here the German car maker produces Vento, Skoda Fabia, VW Polo and Skoda Rapid. Skoda Auto had first set up its individual plant in Aurangabad, which was also used by Audi India.