Mahindra is reviewing an upgrade of its vehicle assembly facility near Durban, with completely knocked-down (CKD) production among the options being evaluated.
Sources cited by Bloomberg said the Indian carmaker is working with South Africa’s state-owned Industrial Development Corporation to study whether CKD operations could be introduced at the site.
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The company has been assembling semi-knocked down vehicles at the plant since it began operations in 2018.
The review comes amid rising demand for lower-cost vehicles in South Africa’s mid-market, where competition from Indian and Chinese manufacturers has been increasing.
Producing more vehicles locally could also help Mahindra limit the effect of any import duties being weighed by President Cyril Ramaphosa’s administration as it seeks to bolster domestic vehicle production.
Mahindra builds its Pik Up light trucks at the facility in the Durban area.
These vehicles are used by farmers in South Africa and by police forces in neighbouring Mozambique.
A move to CKD assembly would mark an advance in the plant’s local manufacturing role.
Under the CKD model, vehicles are imported in parts and assembled locally, reducing reliance on fully built-up imports and potentially lowering tariff exposure.
Elsewhere in South Africa’s automotive sector, Chery Automobile agreed earlier this year to acquire Nissan Motor’s local plant.
Mercedes-Benz Group is also weighing a plan to share its South African factory with Great Wall Motor.
Bloomberg also reported that Tata Motors Passenger Vehicles has returned to the South African market after a long absence, importing vehicles from India.
Separately, Mahindra said in February that it would invest Rs1.96bn ($21.6m) to expand Mahindra Research Valley in Chennai, Tamil Nadu.
The company said the development of its research and development centre and testing infrastructure would add capacity for vehicle design, product engineering and future technology work.
