Mahindra & Mahindra (M&M) plans to increase localization of its Scorpio pick-up at its factory in South Africa’s Durban, as it seeks to make deeper inroads into the adjoining African markets and get around trade barriers. M&M is also looking to set up contract-manufacturing units in Kenya and Sudan, Arvind Mathew, chief of international operations, M&M, said.
“My objective is to increase local content, which allows us to export fully-built units out of South Africa to countries, including Mozambique, Zambia, Tunisia,” said Mathew. He explained M&M's vision of increasing the percentage of locally-procured parts from South Africa to 40% over the next one and a half years.
M&M plans to increase the number of factories in the Africa region and plans are in motion to have one each in Sudan and Kenya, said Mathew. “With trade barriers becoming the order of the day, having a local production unit is the only way to get around it,” said Mathew, citing an instance of Kenya’s recent auto policy, which limits the import of certain kind of completely-built units.
M&M opened its first assembly unit in Durban in May 2018 as part of a larger strategy to make South Africa a second base outside India. With an annual capacity to make 2500 pick-ups, the Durban factory can be scaled up to 4,000 units per year.