Mahindra is planning to acquire General Motors’ now-defunct Talegaon plant in Maharastra
Mahindra might soon acquire General Motors’ (GM) now-defunct Talegaon plant in Maharashtra to meet the increasing demand for its latest SUVs. This comes in the backdrop of Tata Motors acquiring Ford’s Sanand plant in Gujarat after the American maker’s exit.
Sources said several Mahindra executives have reportedly visited the GM’s plant in the last few weeks after GM’s talks with China’s Great Wall Motors for the plant acquisition expired recently. If the talks with Mahindra turn into action, GM will soon have a comfortable exit.
GM is eyeing around Rs. 600 crores for the sell out and says that the factory is in working condition. In fact, the company was using it until December, 2020, for exports just like how Ford was using the Chennai plant even after stopping most Indian operations.
Mahindra currently has a delivery backlog of 2.4 lakh SUVs mostly comprising of XUV700, Thar, and the recently-launched Scorpio N. It’s also planning to introduce the 5 door Thar which will further increase the backlogs.
As of now, a Mahindra SUV’s waiting period goes up to a whooping 18 months, a period after which many new models would have been launched and discontinued in the market.
Developing a new plant that produces over a quarter million cars requires a company to pump in about Rs. 5000 crores and an additional Rs. 8000 crores for ancillary ecosystem. So, if Mahindra is able to seal a great deal, it would be 1 of the best moves in the industry.
Interestingly, GM’s Talegaon plant is located just 20 km away from Mahindra’s existing Chakan plant and has great supply chain and transportation network. GM also claimed that the plant is well maintained to this date.
Even if Mahindra isn’t able to acquire the Talegaon plant, it has confirmed that it will get a new plant up and running anyhow. The company is already in talks with many state government regarding the maximum subsidies it can get.
