Mahindra SA Signs MoU to Explore the Viability of Auto Manufacturing in South Africa

Mahindra South Africa, the Indian automative giant's local subsidiary, has signed a Memorandum of Understanding (MOU) with the Industrial Development Corporation (IDC) to conduct a comprehensive feasibility study on the potential establishment of a Completely Knocked Down (CKD) vehicle assembly facility in the country.

As it enters its third decade in KwaZulu-Natal province, which it often refers to as "Mahindra's second home," Mahindra South Africa is also expanding its production capacity at its assembly facility run by AIH Logistics.

Mahindra South Africa CEO Rajesh Gupta stated, "Achieving the milestone of our 25,000th locally assembled Pik Up demonstrates Mahindra's expanding footprint and long-term commitment to South Africa."

"With this Memorandum of Understanding, we can look into the possibility of increasing our local assembly capacity as we continue to fortify our operations. Gupta went on to say that this study will support South Africa's industrial growth goals and offer insightful information about the potential for deeper integration into the country's automotive landscape."

With sales of its locally marketed cars, especially its pickup, surpassing those of more well-known Japanese and European brands, Mahindra has emerged as the nation's fastest-growing brand in recent years.

The MoU is a significant step forward in assessing the potential for increased local manufacturing, with a detailed study planned to look into key factors such as South Africa's automotive industry incentives, export market potential, workforce development, and supply chain infrastructure.

The study will also evaluate logistics and supply chain feasibility, including potential locations, to determine how Mahindra can better integrate into the country's industrial landscape, including New Energy Vehicles (NEV).

The partners emphasised that, while the MoU indicates Mahindra's intention to explore local manufacturing opportunities, it is only an evaluation at this point, and no commitment has been made to establish a CKD facility.

The study will provide Mahindra South Africa and IDC with an informed assessment before making any future decisions.

Mahindra's dedication to the feasibility study aligns with the goals of the South African Automotive Master Plan (SAAM) 2035, which aims to increase the nation's competitiveness as a location for automotive assembly, according to Rian Coetzee, Acting Divisional Executive for Industry Planning and Project Development at the IDC.

According to Coetzee, the company has a great deal of potential to boost its production output in South Africa, which could result in the creation of jobs, contingent on the feasibility study's findings.