Mahindra & Mahindra prepares for long solo ride in the CV business

Mahindra & Mahindra (M&M) is not actively seeking, for now, a new partner to fill the void created by the exit of its JV partner, US-based Navistar International Corporation, in its commercial vehicle business run under the aegis of Mahindra Navistar Automotives (MNAL) till recently.

“But we are not closed to it if an opportunity arises or if it makes business sense. At the moment, we have what we want in terms of both resources and infrastructure,” said Dr Pawan Goenka, president, automotive and FES, M&M, at a press meeting in Delhi.

At present, talks are at an advanced stage with Navistar for the import and marketing of trucks for the South African market with Navistar badging. This is expected to be finalised soon.

“No master agreement exists with Navistar on imports and it will be purely a market to market decision,” said Dr Goenka. The separate JV for engines under Mahindra Navistar Engines (MNEPL) has developed a six-cylinder 7.2-litre engine with variants in 207hp, 170hp and 260hp categories in addition to engines for off-highway applications. A four-cylinder, 4.8- litre engine is close to completion and will be available in several versions.

M&M’s trucks business has 7-8 variants and it plans to add to the product portfolio under a changed branding identity following Navistar’s exit. For trucks, it does not require Navistar’s further support but has an arrangement for continuing support for the existing engine range. Goenka says the 4.8 litre and existing engines could well power the 11-tonne and above truck range. “For beyond 40 tonnes, we will need a new engine but not now.” For the below-11 tonne range, the 3.3-litre Mahindra engine will suffice.

Post-Navistar, M&M has lined up between Rs 200-250 crore investments for developing new variants and in maintaining the current range of vehicles over the next 2-3 years. The company, however, admits that it has gaps in its large buses portfolio and in the 9-12 tonne products; it is looking for ways to bridge the gap. The now-dissolved joint venture recently launched new tippers including haulage trucks.

With the CV business now fully owned by M&M, it has no plans to dilute the current business or opt for reverse merger. Some government approvals are still awaited with the acquisition process expected to be completed in another two months. A new board, slated to meet in April, is expected to revisit all the prior decisions on new bus and truck models.

Navistar and M&M set up the JV in late 2005 to manufacture trucks and buses in India, source components and provide engineering services for the design and development of Navistar vehicle products. The JV for engines was formed in 2007 and engine production commenced in 2010. Goenka attributed the exit of Navistar from the JV to financial problems that did not allow Navistar to make further investments in its Indian joint venture.

SHOBHA MATHUR