Mahindra & Mahindra (M&M) has completed the expansion of its Zaheerabad manufacturing plant in the Indian state of Telangana, reports the Press Trust of India. The plant expansion has involved an investment of INR2.5 billion (USD39.7 million) over the past year. Initial production of a small commercial vehicle (SCV), codenamed 601, has started at the plant, while serial production is likely to start some time in the first half of the current financial year, which ends in March 2016. Following the expansion, M&M's annual production capacity at the site has increased to 92,000 units from 75,000. Besides the SCV, M&M will produce utility vehicles and three-wheelers at the plant. Separately, six M&M suppliers are also setting up plants at the suppliers' park with cumulative investments of more than INR1 billion, while more have agreed to invest.
Significance: M&M started expansion work at the facility last year. According to IHS Automotive's production database, the Zaheerabad plant currently produces the Cabstar and Di3200 commercial vehicles, although the facility is primarily used for production of farm tractors. A minicar is also among the new models set to be produced at the plant. M&M's yet-to-be-launched SCV will compete with the Tata Ace, which is the segment leader in India. Although sales of small commercial vehicles have declined over the past year in India, demand is expected to pick up as the economy improves. These small vehicles are used for the intra-city distribution of goods as last-mile delivery solutions.
