Mahindra South Africa (SA) should start local semi-knockdown assembly of its new generation Mahindra Pik Up and Bolero bakkie within the next six months, says Mahindra Automotive and Farm Equipment International Operations chief Arvind Mathew.
“Local assembly is my number one priority,” he told Engineering News Online in an interview on Thursday evening. “South Africa is a huge priority for Mahindra. We believe we have to invest in the country. The aim is to have the first vehicle roll off the line in the next six months.”
Mathew attended the launch of the Mahindra Pik Up in the Magaliesberg.
Mahindra SA is still a relatively small player in the local auto market, but has been growing sales steadily since its arrival 13 years ago.
New-vehicle sales reached 3 250 units in the 2015 financial year, ending March 31, with 5 000 units possible for the current financial year, said Mahindra SA CEO Sanjoy Gupta.
“If we achieve this, it would mean we have had 53% growth since 2015.”
Mathew said the financial business case for local assembly did “not make sense”, but that the investment was necessary as Mahindra viewed South Africa as the Indian conglomerate’s stepping stone into the wider African market.
“The general approval for assembly is there, but a few decisions still need to be taken.”
These decisions include production location (Durban or Port Elizabeth), as well as whether Mahindra SA would make use of a contract assembler, or keep assembly in-house.
“We are way beyond whether we should do it or not,” said Mathew.
Mahindra SA sold 375 vehicles in South Africa in September, including 73 Boleros and 89 Pik Ups.
With production volumes under 10 000 units a year, Mahindra SA will not qualify for any assistance from government's Automotive Production and Development Programme.
Mahindra SA has homologated two tractors (80 hp and 90 hp) for sale in the African market, added Mathew.
Despite the average size of South African farms demanding tractors of around 120 hp, he believed there was space for Mahindra’s farm equipment on the local market.
Mahindra tractors would probably go on sale in South Africa in 2018.
Tractor sales will not happen through the Mahindra vehicle dealerships.
“We will separate tractor and vehicle sales,” emphasised Mathew.
He added that Mahindra was also mulling selling backhoe loaders in South Africa.
Mahindra is the world’s biggest tractor manufacturer, by volume.
MAHINDRA PIK UP
The new generation Mahindra Pik Up is a more powerful vehicle (103 kW) with a new six-speed transmission. Specifications have been significantly upgraded to include a touch screen infotainment and navigation system, a multifunction steering wheel, increased ride comfort, cruise control, a new dark interior and a towing capacity of 2.5 t.
Mahindra SA hopes the new Pik Up will boost the company's sales in the local market, said Gupta. He said the enhancements made to what was previously known as the Scorpio Pik Up should broaden the vehicle's appeal, attracting "larger volumes of people" to the Mahindra brand.
Pricing for the basic single cab workhorse Pik Up starts at R187 995, with the service plan optional, with the top of the range 4 x 4 double cab priced at R354 995.
Pricing includes a four-year /120 000 km warranty and roadside assistance, as well as a five-year/90 000 km service plan. Services are at 20 000 km intervals, or every 12 months, whichever comes first.