BRAZIL: Mahindra to make vehicles locally
This was a well-kept secret. Mahindra has agreed a deal with Brazilian group Bramont and is present at the ongoing 24th São Paulo Auto Show, due to end on 29 October.
The stand is a discreet one in a secondary hall of the fair but local investment will not be that shy. It starts with $US15m and may reach $150million, split between the partners.
Production is scheduled for mid-2007 with 20% local content, which is to increase to 80% in two years. For the start, former Crosslander facilities in Manaus, capital of State of Amazonas, in northern Brazil, will be used. The Romanian company ended up shutting down following disagreements with its Brazilian and American partners.
Currently, Bramont assembles motorcycles and scooters at the site, but it has already acquired an almost 100,000 square metre (1,077,000 sq ft) facility nearby.
Production mix accounts for 60% SUV and 40% both standard and crewcab pick-up trucks at competitive prices for the local market, with initial volume forecast at 2,500 units yearly distributed through 25 outlets.
Plans include exports to other Latin American countries. The model displayed is the Scorpio, the same one exhibited at the 2006 Paris show, but it will be marketed in Brazil as the Mahindra SUV in an attempt to make the brand known.
The Mahindra range is already exported to some European countries, among them Italy, Spain, France and Serbia, as well as South Africa.
The Indian group also has an extreme low-volume assembly operation for an earlier model in Uruguay and a modest commercial vehicle activity in the USA as well.
According to José Oliveira Neto, commercial director for Bramont, which has agreed a technological partnership with the Indian automaker, a lean and efficient operation was organised for competitiveness in the Brazilian and Latin-American markets.
Sanjeev Mohoni, vice-president of foreign operations for Mahindra, who attended the show in São Paulo, acknowledged the importance of installing production capacity in the country considering market size and readiness for a likely bilateral trade accord between Brazil and India.
The company has been swifter off the mark than compatriot Tata, which is still negotiating with Fiat over an operation in Argentina.
The new SUV has practical rather than beautiful looks, stands almost two metres (6ft 6in) tall and features independent front suspension and a five-link, solid axle at rear.
The in-house-made 2.6-litre (158.6 cu in) turbodiesel engine pumps out 110 hp and meets the Euro IV emission-like requirements to be applied in Brazil as of 1 January, 2009. Four-wheel drive is electrically engaged.