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M&M And Tata Motors Investing For Capacity Expansion Soon |
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The two giant automobile companies in India, the Tata Motors and Mahindra & Mahindra (M&M) have made two different announcements on Monday and said that they are planning to make some significant investments in India very soon. The companies have informed that the investments would be made in their manufacturing capacities located at Chakan near Pune and the total investment from both the companies would be around Rs 7,500 crore. Out of the total amount, Tata Motors will bring in Rs 6,000 crore and the rest of Rs 1,500 crore would be invested by Mahindra & Mahindra.
According to one of the sources from the industry, the Tata Motors would utilize the investment for adding further to its existing manufacturing units and the investment from M&M will come in addition to the Rs 2,500 crore that it has already earmarked. The investment was assigned by the company for making commercial vehicles at a Greenfield site at Chakan. The officials from the Tata Motors added that the company would invest the amount over the next 4-5 years for increasing the capacity in its Pune plant, for adding new products and also for building vehicle-testing facilities.
The MD of Tata Motors, Mr. Ravi Kant was talking on the issue and said that this capital expenditure is going to help the company in increasing the capacity in its Pune plant by about 40% to over 600,000 units per year. The company has also recently announced that it is thinking of raising a debt of $4 billion for its local and overseas expansion plans, very soon. Mr. Kant added that the firm interest rates and volatile raw-material costs are a big concern for the new fiscal year that is starting this April. The industry sources further informed that the investment by the Tata Motors is so far the single largest investment by the automobile sector in the state of Maharashtra. The sources added that the M&M that recently walked out of a planned venture with Renault and Nissan Motor will start its operations at Chakan very soon.
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