Shyam G. Menon

M&M to invest Rs 100 cr in expanding Nashik plant capacity

IN A NEW AVTAR: Mr Anand Mahindra, Vice-Chairman & Managing Director, Mahindra & Mahindra Ltd, launching the all new Scorpio at Nashik on Monday. — Paul Noronha

Nashik , March 13

Mahindra & Mahindra Ltd (M&M) today formally launched a new version of the Scorpio, replacing its earlier model in the domestic market without any change in the price tag.

"At this point, we haven't decided yet when to take the prices up. But we would do it probably in a month-and-a-half from now. We really haven't decided," Mr Rajesh Jejurekar, Executive Vice-President (Marketing & Sales - Automotive Division), said at a press briefing, addressed by the Vice-Chairman and Managing Director, Mr Anand Mahindra, and President (Automotive Division), Dr Pawan Goenka.

Over 40 changes

The new version of the high selling utility vehicle incorporates over 40 changes and sports a common rail diesel engine (CRDe) across all finishes.

Given stricter emission norms, Scorpio sales had gravitated to near 95 per cent CRDe models (they are costlier) in the recent past. The petrol version of the vehicle, fitted with a Renault engine, would be available for the export markets.

The product upgrade took 18 months and cost the company Rs 30 crore.

By Friday, the new Scorpio would be available in Delhi, Mumbai and Bangalore. Sales would be national by April.

According to M&M officials, Scorpio prices currently span Rs 7.06 - 8.18 lakh (ex-showroom Delhi), also the range for the new version to retail until a price revision is announced.

Only new models

As of February 18, the Nashik plant has stopped producing the old models and switched over to new ones. By the beginning of the month, dealer stocks of the old model were down to around 8-10 days. "The pipeline is reasonably dry. Stocks of the old version are not more than 8-10 days. On that there should be discounts," Mr Jejurekar said.

Customised cell

The company is setting up a "customised vehicle cell" to cater to specific customer tastes. Production capacity at the plant for Scorpio is being ramped up to 180 vehicles per day from the current 132. Over the next one-and-a-half years, the company plans to invest Rs 100 crore at its Nashik plant to enhance total capacity from 330 vehicles per day to 570 per day, Dr Goenka said. The share of exports in M&M's automotive revenues is at present 4-5 per cent.

Mr Mahindra said that over the next three years, every group company has been tasked with raising that to 20 per cent in their respective revenues. The new Scorpio has been homologated for its major export markets and the first shipment of 150 vehicles has been done.

S. Africa, Russia markets

The company sees promise in South Africa, where Dr Goenka expects sales of 2,000-2,500 units by the year-end (a pick-up version of the Scorpio, reportedly destined for South Africa, was visible on the assembly line). But there are higher hopes for the Russian market.

While Russian automobile manufacturer, Gaz, would be local partner, details of the joint venture have not been finalised.

M&M had some time back announced understanding with the Sun Group for its Russian foray and the eventual arrangement could be tripartite.

However, Dr Goenka maintained that the Russian foray would be with the Scorpio and not the Bolero, which is a cheaper utility vehicle.

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