Mahindra Navistar announced on December 6, 2011 its plans to invest an amount of Rs. 250 crore at its Chakan plant to increase the production of its commercial vehicles and expand its distribution network. Mahindra Navistar Automotives is a joint venture between Mahindra & Mahindra and the US-based Navisar International Corporation.
Mahindra Navistar Director Mr. Pawan Goenka stated, “We will be investing around Rs 250 crore in the next couple of years to increase production capacity of HCVs and expand our distribution network.” He added that the company is not earning any profits currently owing to small volumes. Hence, with an enhanced production capacity, the company expects to start earning profits by the end of 2012. The company plans to add about 50 dealerships to its existing 48 by the end of 2012 or mid 2013.
Mr. Goenka is of the opinion that with the pause in the interest rate hike as indicated by the Reserve Bank of India, the demand for commercial vehicles is also expected to grow, especially in the agriculture and construction sector.