Mahindra Eyes Massive Greenfield Plant, Location Decision in Six Months
Overview
Mahindra & Mahindra is set to finalize the location for a new greenfield manufacturing plant within six months as it aims to boost UV capacity beyond one million units by FY27. The expansion supports demand for its SUV portfolio and upcoming electric vehicles, reinforcing its strong market position.
Greenfield Plant Location to be Decided
Mahindra & Mahindra (M&M) will confirm the site for its new greenfield manufacturing facility within the next six months, according to a senior company executive. This strategic move is designed to significantly enhance the automaker's utility vehicle (UV) production capacity, targeting a milestone of over one million units annually by fiscal year 2026-27.
Rajesh Jejurikar, executive director and CEO of Automotive and Farm Equipment Sectors at M&M, stated the decision is imminent. The company is actively evaluating various land parcels across different states, with no geographical restrictions. Jejurikar noted that improved logistics and road networks allow flexibility, and while rail connectivity for vehicle dispatch remains crucial, the new plant need not be adjacent to existing manufacturing hubs.
Capacity Expansion Strategy
The planned greenfield project is a key component of Mahindra's three-pronged capacity enhancement strategy. This includes optimizing output from current facilities through debottlenecking and establishing new capacity at its Chakan plant to support an upcoming vehicle platform launching in August. The new greenfield plant is intended to meet medium-to-long-term demand projections.
Mahindra has previously announced its intention to increase monthly vehicle production from 61,500 units to 85,000 units by the end of fiscal year 2026. This increase will push its annual installed capacity beyond the million-unit mark. The expansion will accommodate higher output for popular models like the XUV 3XO and Thar ROXX, alongside an additional 120,000 units per annum at Chakan for the new platform.
Demand Drivers and Future Outlook
The company anticipates strong volume growth, driven by models such as the recently launched XUV 7XO, a facelift of the XUV700. Analysts predict this model could see a 30% rise in monthly sales, from 7,000 to 10,000 units. Motilal Oswal analysts project M&M to continue outperforming industry growth, forecasting a 14% volume compound annual growth rate (CAGR) in UVs over FY25-28E, with volumes reaching approximately 1.1 million units in FY26-27 and 1.23 million in FY27-28.
Mahindra remains committed to profitable growth, aiming to expand market share while preserving margins. Future product launches, including several new ICE SUVs and five battery electric vehicles (BEVs) built on next-generation platforms, will further necessitate increased production capacity.
