Mahindra South Africa and the Industrial Development Corporation (IDC) announced on Tuesday, that they have signed a Memorandum of Understanding (MoU) to assess the feasibility of establishing a Completely Knocked Down (CKD) vehicle assembly facility in South Africa.

Mahindra South Africa is a fully owned subsidiary of Mahindra & Mahindra of India. It is celebrating its 20th year of operations in South Africa.

Mahindra & Mahindra, with its local division, will compete against rivals with established plants in South Africa, whose export-focused auto manufacturing sector has attracted billions of dollars in investment from global giants like BMW, Ford, Volkswagen, and Toyota to expand and upgrade their factories."

This potential expansion could create jobs in the automotive sector, which is vital given South Africa's high unemployment rate.

Mahindra South Africa, already assembling vehicles locally through AIH Logistics in KwaZulu-Natal, celebrated producing its 25 000th locally assembled Pik Up on Monday.

The company has dealers in all nine provinces of South Africa, which are comprehensive facilities that handle sales, service, and spare parts. These dealers offer the full range of Authentic SUVs, such as the XUV300, XUV700 and Scorpio-N, a SA Car of the Year semifinalist, and its range Authentic Bakkies, such as the much-loved Pik Up Karoo Dusk, Dawn and Storm.

The MoU

The MoU aims to study expanding this capacity, looking at factors like automotive incentives, export potential, workforce development, supply chain infrastructure, and New Energy Vehicles (NEVs).

Additionally, the study will assess logistics and supply chain feasibility, including potential locations, to determine how Mahindra can further integrate into the country’s industrial landscape, including NEVs.

Rajesh Gupta, the CEO of Mahindra South Africa, said, "Reaching the milestone of our 25 000th locally assembled Pik Up is testament to Mahindra’s growing footprint and long-term commitment to South Africa. As we continue to strengthen our operations, this MoU allows us to explore the feasibility of expanding our local assembly capabilities. This study will provide valuable insights into the potential for deeper integration into South Africa’s automotive landscape while supporting the country’s industrial growth objectives.”

Rian Coetzee, Acting Divisional Executive for Industry planning and project Development at the IDC, added, “Mahindra’s commitment to ramp up its feasibility study in SA aligns with the objectives of the South African Automotive Master Plan (SAAM) 2035, which focuses on strengthening the competitiveness of SA as an automotive assembly location. Depending on the outcome of the feasibility study, there is great potential for the company to increase its production output in South Africa, thereby creating employment opportunities.”

The SAAM 2035 outlines a strategic vision to develop "a globally competitive and transformed industry that actively contributes to the sustainable development of South Africa's productive economy, creating prosperity for industry stakeholders and broader society."

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Mahindra South Africa partners with IDC to evaluate new vehicle assembly plant