Mahindra talks about setting up a plant in Brazil, with no definite time frame
After Hero announced plans of setting up a new plant in Brazil in the future if need arises, another Indian vehicle manufacturer has spoken about setting a facility in Brazil. In an interview with Financial Express, Mahindra have spoken that if need be, in the future they might setup a plant in Brazil.
As per the report in Financial Express, Brazil has introduced certain taxes on companies with not enough local consideration and value additions. These tax barriers would otherwise make products uncompetitive in the Brazilian markets and hence the need for a new manufacturing base.
Mahindra & Mahindra looks forward to taking advantage of these new tariff barriers introduced in Brazil which is offered to automakers sourcing parts indigenously and opting for local product development strategies. M&M’s presence in Brazil is dominated by the Scorpio SUV and Pick-up. These two models are produced in association with local partners, Bramont with a plant in Manaus.
These plans are yet to be finalized but considering that Brazil is a good market and the fact that M&M will be working along with Inovar, it should not be long before the new manufacturing plant comes into effect. However, M&M could be viewing location of the new plant closer to major markets of Sao Paulo and Rio de Janeiro as against a plant in Manaus so as to take advantage of reduced logistic costs.
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