Last week, sourcing a report from the Financial Express, we reported about Mahindra and Mahindra’s (M&M) plan to come up with a production plant in Brazil to tackle the new tariff barriers recently introduced by the South American country.
The plan for the new plant came after Brazilian government announced new strategy aiming at promoting more global manufacturers to set up production facilities in the country. Inovar-Auto incentive programme, introduced in 2012, offers tax sops for automakers sourcing parts indigenously and promoting local product development.
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However, the latest statement issued by the company said, “Dr. Goenka has clearly said that it is not in the near plans and hence there is no decision on it yet. The news was of the general nature that in order to sell in Brazil, Mahindra will have to look at local manufacturing.”
“It does not talk about any definitive plans to set up manufacturing in Brazil and as such this article does not have any material impact on the company,” Mahindra added.
Rising fuel prices and increase in the excise duty on SUVs resulted in sales dip in FY14. M&M’s volumes fell 8% to 2.54 lakh units in FY14. Exports in the fiscal, however, were up 23% to 7,599 units.
Source: Reuters