Mahindra & Mahindra (M&M) has opted out of the passenger vehicle market in Brazil, one of the top 5 car markets in the world. It had entered the LatAM market in 2008 to tap the growth potential available there. But things didn't go as planned.

M&M has now decided to exit Brazil's passenger vehicle market. "It is a combination of the economic environment and policy changes," said Pravin Shah, chief executive – Automotive Sector, M&M, in a conversation with Autocar Professional today.

M&M had joined hands with a company called Bramont-Montadora Industrial e Comercial de Veiculos Ltda to assemble vehicles in Brazil. Mahindra's Scorpio SUV, its Pik-Up range (single and double-cab) and the XUV 500 were sold in Brazil. The key reason for M&M's exit is Brazil's Inovar programme, which is aimed at promoting investment and manufacturing in the country. It also levied an additional 30 percent tax on imported vehicles. Moreover, M&M was only operating in five percent of the Brazilian market as the rest of the market comprises flex-fuel vehicles (vehicles that can run on ethanol). In addition to these factors, Brazil's currency also depreciated by over half in the past three years, said Shah. Shah adds that Mahindra will continue supporting its customer base of over 4,000 users even as it shuts operations in the South American market.