Mahindra & Mahindra Limited, the largest utility vehicle manufacturing company of India is planning to set up a production facility in South East Asia. The countries including Thailand, Indonesia and Malaysia are the targets to meet their plans for becoming an international leader in the automotive industry in the next few years. They see the plans to become a reality in the coming years. Mr. Pravin Shah, Chief Executive Officer at International Operations department said that one facility in South East Asia will be capable to meet the rising demands across the region. More than ever, it will be easy to set up a production facility specifically in Asian countries with Asian Free Trade Agreement policy handy.
This particular agreement enables member nations occupied in agreement for setting up a local production plant and allows reduced tariff rates of products to range of 0 to 5 percent. This type of contract helps Mahindra & Mahindra Limited for setting up a new production facility in one of the Asian countries and benefit from low tariff rates reserved for these countries. Indonesia, Thailand and Malaysia are the 3 nations that are members in contract where they can uphold competitiveness in spite of being a foreign nation for setting up the production plant.
This will essentially help Mahindra & Mahindra Limited in placing price of its cars. The company hopes to increase volume of exports from 15 to 20 percent among Asian markets from proposed facility in one of the South East Asian nations. It has production plant in Egypt and Brazil so far. Besides upcoming sport utility vehicles like Rexton and Korando, there are other models likely to be a part of exports from these areas.
