Mahindra South Africa has signed a Memorandum of Understanding (MoU) with the Industrial Development Corporation (IDC) to conduct a comprehensive feasibility study on establishing a Completely Knocked Down (CKD) vehicle assembly facility in the country.
The study will evaluate the potential for expanding Mahindra’s local manufacturing footprint, assessing key factors such as government incentives, export market viability, supply chain infrastructure, and workforce development.
Commitment to Local Growth
Mahindra South Africa, a subsidiary of the Indian automotive giant, is already increasing production capacity at its existing KwaZulu-Natal-based assembly facility, operated by AIH Logistics. This expansion coincides with the company’s 25-year anniversary in South Africa, which it has frequently referred to as its “second home”.
“Reaching the milestone of our 25,000th locally assembled Pik Up is a testament to Mahindra’s growing footprint and long-term commitment to South Africa,” said Rajesh Gupta, CEO of Mahindra South Africa.
The brand has emerged as one of the fastest-growing automotive companies in South Africa, with its Pik Up range outperforming traditional Japanese and European competitors in the local market.
Assessing Local Manufacturing Feasibility
The feasibility study will explore multiple factors that could influence the establishment of a CKD assembly plant, including:
- Government incentives within South Africa’s automotive sector
- Export opportunities for locally assembled vehicles
- Workforce development and skills training
- Supply chain and logistics infrastructure
- Potential locations for a new assembly facility
- Integration into the country’s evolving automotive landscape
- Opportunities for New Energy Vehicle (NEV) manufacturing
While the MoU reflects Mahindra’s growing interest in expanding local manufacturing, no formal commitment has been made yet. The study will provide insights to guide future investment decisions.
Alignment with South Africa’s Automotive Master Plan 2035
The initiative aligns with the South African Automotive Master Plan (SAAM) 2035, which seeks to enhance the country’s competitiveness as a global vehicle assembly hub.
Rian Coetzee, Acting Divisional Executive for Industry Planning and Project Development at the IDC, emphasized the potential economic benefits of the project.
“Depending on the study’s outcome, Mahindra could significantly increase its production output in South Africa, fostering job creation and strengthening the local manufacturing sector,” Coetzee said.
Potential Industry Impact
Should Mahindra move forward with local CKD assembly, the decision could:
- Expand South Africa’s vehicle production capacity
- Generate new employment opportunities in the automotive sector
- Strengthen local supply chains and infrastructure
- Support South Africa’s transition to New Energy Vehicles (NEVs)
Mahindra’s growing investment in South Africa underscores its long-term commitment to the region, with the feasibility study marking an important step toward potentially deepening its local operations.