The Indian auto market is not exactly in its vigorous form. After a couple of years’ declined sales and pretty severe market slump, the Indian auto industry has just slowly begun to show signs of positive growth. While most of the car makers are happy to see the upcoming market revival in India, they are also looking into as many prospects to raise their profits as possible.
In such a situation, the India bred car makers seem to be the hardest hit ones. Indian utility vehicle leader, Mahindra & Mahindra being one of the car majors which is not very happy with its market performance yet is thus looking into the other avenues to boost the company’s income. According to recent reports Mahindra & Mahindra is going to invest heavily in the Indian defence operations, which the company thinks would be profitable in such times.
The Defence operations are in constant need of sturdy vehicles which Mahindra & Mahindra is very well known to manufacture. Mahindra & Mahindra is expected to boost its profits by selling its heavy duty vehicles specially manufactured for the Indian defence operations. Even Mahindra’s Indian fellow car major, Tata Motors is reported to be heavily investing in the defense operations, as the company’s situation is even worse than Mahindra when domestic sales are concerned.
In the month of July this year, the Indian Union Budget opened up the defense sector for Foreign Direct Investment (FDI) and significantly for the domestic segment. The Indian government has now allowed more private participation in the Indian defence manufacturing from this year onwards. Under the new FDI rules, the foreign companies can now form joint ventures along with the domestic vehicle manufacturers to produce parts as well as full systems for the Indian defence forces.
The Indian industrial major Tata Group has already announced that it is going to invest a staggering $35 billion (equivalent to Rs. 2,119 crore) within the next 3 years to expand its presence and operations in the new areas that include the Indian defence forces. The company said that it is going to focus on a number of new sectors including the Indian defence sector in the coming years to expand its footprint in the home market.
Coming back to Mahindra & Mahindra and its plans to expand its operations in the Indian defence sector, the auto major already has commendable presence in the defence sector, as the company is responsible for manufacturing a number of armored vehicles that are used in the paramilitary forces at present. The auto major however is going to expand its presence further in the domain and the company has also announced about the same.
Mahindra & Mahindra has announced that the company will expand one of its facilities that is currently responsible for manufacturing parts for planes, including the ones that are used by the Indian Air Force. Mahindra will also invest heavily to expand its armored vehicles program as well as its radar systems production.