Hyderabad: Auto major Mahindra and Mahindra on Tuesday said it will invest Rs 1,500 crore to develop a new vehicle platform with its Korean subsidiary Ssangyong Motor.
M&M holds 70 percent stake in SMC, for which it had shelled out USD 463 million (about Rs 2,105 crore) in 2010.
"We expect to see three products jointly developed with Ssangyong. There, we are investing close to Korean Won 300 billion which is almost Rs 1,500 crore," Pawan Goenka M&M President, Automotive and Farm Sector told reporters at the launch of Quanto, a mini SUV.
"This is over next three years and this is only for one product with Ssangyong. There will be more investment for other products," he added.
Goenka also said Rexton SUV will be launched in India which would represent the first product under the Ssangyong label in the Indian car market.
He said M&M and Ssangyong are developing a new engine platform both for petrol and diesel that will be used by both the companies.
He said currently they are selling around 10,000 units of Ssangyong and this year the sales may be flat due to the slowdown in the Korean and European markets.
Replying to a query on exports, Goenka said M&M has registered a growth of 50 percent last year and this year also it may do well.
"Right now exports will be 6 to 7 percent of overall sales. Percentage wise not very high but growth is very high.
"The growth this year may be not 50 percent...Somewhat less but pretty good growth for us especially SUVs are coming in," Goenka said.
On overall auto industry, he said that growth this year will be less than 10 percent and is expected to go up next year.
"Since Maruti's manesar issue has been settled, the next seven month's in the year may not be as slow as the first five months. But I don't expect to get back to 20-30 percent growth that we have seen in FY'09 and FY'10.
"We will still be growing less than 10 percent as industry and hope to get above 10 per cent next year not this year," Goenka said.
He said M&M's tractor manufacturing plant in Andhra Pradesh is expected to launch commercial product by the end of this year or early next year.