Will Mahindra's New Plant Be Outside Maharashtra?

Mahindra & Mahindra is planning to build a new plant and reports say for the first time this plant will be located outside the state of Maharashtra. The Indian carmaker intends to build a new plant that will require an investment of Rs.3,000 crores to Rs.4,000 crores. The recent changes in Maharashtra's tax policy on car makers is being said to be the reason behind Mahindra's decision.

Maharashtra had managed to create an automobile manufacturing hub near Pune by attracting carmakers through a policy of low VAT and other discounts. But the state government reversed its decision to offer low VAT to these carmakers. The state is now charging lower VAT to cars sold only in Maharashtra.

Major manufacturers such as Mahindra, Volkswagen, Bajaj Auto and Skoda who have operations in the state had expressed their displeasure about the decision. While we expected to a solid reaction from any carmaker to come only after some time, Mahindra has started scouting for a location for a new plant.

Mahindra is said to be in talks with various state governments to set up its new plant. The new plant will have a annual production of more than two lakh units. The company requires about 500 acres of land for the plant and if any state agrees to provide it with land and some discounts, we might see a Mahindra plant outside Maharashtra for the first time.

There are four major auto hubs in the country – Gurgaon near Delhi, Chakan in Maharashtra, Chennai, Tamil Nadu and the Gujarat which is slowly attracting more and more carmakers.