Mahindra and Mahindra Limited, the country's leading utility vehicle maker, has revealed intentions of investing an astonishing amount of $ 900 million (close to Rs. 4,927 crore) dedicated towards developing new models over the next four years. Further, it has also been confirmed that the Indian auto giant will invest the huge sum in association with its South Korean subsidiary SsangYong Motor Company.
Informing about the company's big future plans and upcoming projects, Pawan Goenka, President, Automotive division and Farm Equipment Sector (FES), Mahindra and Mahindra, was quoted as saying, “We will be investing USD 900 million in four years for development of products jointly with SsangYong.” Goenka further added, “We have plans to bring in several new products to be developed jointly by both the companies and would meet this expenditure partly through fresh equity, internal accruals and external commercial borrowings.”
Goenka has also affirmed that the $ 900 million funds do not include Rs. 5,000 investment, which the company has set aside for a three year time frame ending 2014. When enquired about how the company will manage such a huge investment with SsangYong Motor Co., Goenka said that the spending will be incurred through a mix of fresh equity, internal accruals and debts, over the next one and a half years.
Mahindra and Mahindra, the country's favourite utility vehicle maker, had acquired a 70 per cent majority equity stake in SsangYong Motor Co. in March 2011. The company had shelled out $ 463 million (close to Rs. 2,105 crore) for the high profile acquisition. In October 2012, Mahindra introduced its first SsangYong made product- Rexton premium Sports Utility Vehicle (SUV) in the Indian passenger car market. At present, the Indian auto giant is studying the market for launching its second SsangYong model, the Korando SUV in the country.
Recently at the launch ceremony of Rexton SUV in Kolkata, P. N. Shah, Chief Executive Officer (CEO), Automotive division, Mahindra and Mahindra, was quoted as saying, “We are working on the products. We studied market for both Korando and Rexton and decided that Rexton has a place in Indian market at present so that was given the first priority. We have not shelved our plan to launch Korando in India. We are just looking for the right opportunity.”
