New car assembly plans by Mahindra for South Africa

27 Feb 2025

Mahindra has signed a memorandum of understanding (MoU) with South Africa’s Industrial Development Corporation (IDC) to explore the possibility of setting up a full-scale vehicle assembly plant in the country. This deal paves the way for a detailed study on whether a Completely Knocked Down (CKD) facility would be viable.

Left Rajesh Gupta CEO of Mahindra SA and Rian Coetzee of the IDC | image supplied

Mahindra South Africa is also in the process of increasing its production capacity at its assembly facility operated by AIH Logistics in KwaZulu-Natal. This achievement underscores the company’s growing presence and long-term commitment to the South African market.

The MoU marks a significant step in evaluating the potential for expanded local manufacturing, with a detailed study set to examine key factors such as South Africa’s automotive industry incentives, export market potential, workforce development, and supply chain infrastructure.

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 new energy vehicles (NEV).

While this MoU signals Mahindra’s intent to explore local manufacturing opportunities, it is purely an evaluation. No commitment has been made toward establishing a CKD facility at this stage. The study will allow Mahindra South Africa and IDC to make an informed assessment before any future decisions are taken.

Pik Up

The MoU announcement coincides with a milestone in Mahindra South Africa, which is celebrating a \milestone with the production of its 25,000th locally assembled Pik Up on 24 February 2025.

In August 2023, Mahindra showcased its next-generation Pik Up to a global audience in the country, reinforcing South Africa’s role in its international strategy.

“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. 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.” said Rajesh Gupta, CEO of Mahindra South Africa.

Acting divisional executive for Industry planning and project Development at the IDC, Rian Coetzee, said Mahindra’s commitment to ramp up its feasibility study in SA aligns with the objectives of the South African Automotive Master Plan (SAAM) 2035 whose focus is to strengthen 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 – a factor that has the potential to create employment opportunities,” said Coetzee.