 | « Back to article | Print this article |
Mahindra & Mahindra on Wednesday said it will look at sharing vehicle platforms with that of South Korean company SsangYong Motor, the acquisition of which it expects to complete by December.
"While we will maintain a distinct identity between Mahindra & Mahindra (M&M) and SsangYong vehicles, there is a potential for sharing platforms," M&M President (Automotive and Farm Equipment) Pawan Goenka said. He said a synergy between the two companies could help in bringing down the cost of vehicle developments in future.
"Products from SsangYong will take off from where Scorpio leaves, so there is a fit for us there," he added. Goenka, however, said the SsangYong deal will not have any bearing on the development cost of a SUV code named 'W201' that is to be positioned above the Scorpio.
Asked by when it expects to complete the acquisition, he said: "If all goes as planned and we find nothing that is contrary to what we have understood about the company (SM) during the due diligence, then we should be able to close the deal in four months."
M&M will be doing another confirmatory due diligence in the next six weeks, he added. On Monday, M&M signed an MoU with SM to acquire a majority stake after being chosen the preferred bidder earlier this month.
While Goenka did not disclose the size of stake and the bid sum that M&M agreed for the SM deal, he said the funding of the acquisition could be done through a mix of utilisation of the company's cash reserves, internal accruals and debt. Bullish on the prospects of SM getting good sales, he said it will launch a five seater SUV 'Korando' by 2010-end.
"This will be the first launch by SM in four years. The company is having sales of 7,000 units a month now. We expect it to have about 75,000 units in 2010," Goenka said, adding last year it was at about 35,000 units.
On its plans to launch Scorpio pick-up trucks in the US, he said the company has received the environmental clearance but declined to share a timeline due to its ongoing litigation with its erstwhile exclusive dealer, Global Vehicles (GV).
M&M had planned to launch the vehicle by December 2010 but GV had filed a lawsuit in June alleging inordinate delays.
Goenka also denied reports of M&M's interest in buying state-owned Scooters India, saying, "We have had no interaction with the government and are not looking at Scooters India as of today."
On the Logan front, he said a refurbished version of the sedan could be launched in the next 14-15 months, while work is on for a shorter version (sub 4 metres) that would qualify to avail of the excise benefits of a small car.