M&M gears up for Brazil foray

Mahindra & Mahindra is gearing up for a larger role in the South American market. The company, which already assembles the Bolero in Uruguay and has a CBU operation in Chile, has partnered Bramont to enter Brazil. M&M will assemble the Scorpio single and double cabs in the South American country.

Bramont, which also assembles Chinese motorcycles, will make all the investments in the unit to be located in Manaus in northern Brazil. The plant to be operational by November will initially have a capacity of 5,000 vehicles, which can be scaled up to 10,000 units as volumes increase.

ASSEMBLY OPERATIONS

“The investments are not too much. Bramont uses an established company for contract manufacturing body assembly and trimming of the body. This contract manufacturer has a paint shop, while stamping will go from India. So they would not be investing in the paint shop, stamping or body assembly. These involve the highest investments,” president, automotive sector, M&M, Pawan Goenka said.

Bramont’s commercial director Francisco Oliveira Neto told Brazzil Magazine last October that his company is investing $14 million into the project. According to Neto, the plant will have a built-up area of 20,000 square metres and employ 120 people. Bramont also hopes to have at least 25 dealers throughout the country in a year’s time, he said.

REGIONAL EXPORTS

Goenka added that the Manaus operation would be the only auto plant in the region and therefore be able to avail certain government incentives. “Manaus is very much like Uttarakhand, and we would also be able to export vehicles from there to the Mercosur region,” he said.

This means that M&M will be able to export its pickups from Brazil to Uruguay, Paraguay and Argentina. For the moment, Goenka ruled out the entry of the Bolero or its Scorpio SUV into Brazil, whose SUV market (including pickups) has a size of 2.5 lakh vehicles.

ENTERING EGYPT

For its entry into North Africa, M&M will be assembling the Scorpio in Egypt through its partner Bavarian Motor, which also assembles BMWs and a Chinese vehicle. This unit will have a capacity of 4,000 vehicles a year that can be scaled up to 10-12,000 vehicles when volumes get bigger. In this case too, M&M is not making any investments in the operation.

However, M&M will be responsible for providing quality products to the customers in both Brazil and Egypt. This is why it will have the authority to approve the manufacturing facilities as well as dealerships, which will be exclusively Mahindra dealers, in these two countries. The sales of its vehicles are likely to begin next year.

AMMAR MASTER