Mahindra & Mahindra (M&M) has revised downwards its aggregate investment plan for three years to Rs 15,000 crore from Rs 18,000 crore announced earlier. Less than a year ago, the Mumbai-based company had raised the investment target to Rs 18,000 crore from Rs 15,000 crore.
The revised amount is earmarked for the financial years 2019-20, 2020-21, 2021-22, said a top official of the company. This will be used for product development, new technologies, production enhancements and strategic financial investments.
Pawan Goenka, Managing Director, M&M said, “We have decided to utilise Ford engine plant in Gujarat for producing Mahindra engines which will help us save Rs 400 crore. Because Ford and Mahindra are investing in joint products there is a direct saving of Rs 1,000 crore. So in total, we have already saved Rs 1,000 crore from the Rs 18,000 crore we had lined up and the plan is to reduce it further to Rs 15,000 crore.”
The M&M-Ford alliance will develop C segment and B segment sports utility vehicles which will start hitting the markets as early as the next financial year. However, the fruits of the alliance can be seen this month when Ford launches a connected car solution followed by something similar in April by Mahindra.
Speaking to the media of the sidelines of announcing the December quarter results, Goenka also highlighted the need for normalcy in production in China to avoid any further disruption to the auto industry.
India depends on companies based in China for some critical components such as the electronic control unit. Because of the spread of coronavirus factories in China have been observing extended days of holiday.
“If there is any further delay in components coming in from China it will have a cascading effect on supplies of Bharat Stage IV vehicles to the market. These 3,000-odd vehicles are ready and need just that one component. If we are unable to sell these BS-IV vehicle before April 1 then we will have to appeal to the Supreme Court to grant us time to sell them,” Goenka added.
As per the government notification,, BS-IV vehicles have to be exhausted before April 1 as only BS-VI vehicles will be allowed for sale after that date.