Indian automaker Mahindra is exploring the possibility of establishing a completely knocked down (CKD) vehicle assembly plant in South Africa, marking a potential expansion of its manufacturing footprint outside India.
The company took its first step towards this goal by signing a memorandum of understanding (MoU) with the Industrial Development Corporation (IDC) on Tuesday.
The agreement paves the way for a feasibility study that will assess key factors before any final decision is made.
According to Rajesh Gupta, CEO of Mahindra South Africa, the study will provide crucial insights into the local automotive industry and determine how the company can further integrate into South Africa’s manufacturing sector.
“As we continue to strengthen our operations, this MoU allows us to explore the feasibility of expanding our local assembly capabilities,” Gupta said.
The feasibility study, expected to take between 12 to 18 months, will examine South Africa’s automotive industry incentives, export potential, workforce development, and supply chain infrastructure.
Gupta explained that Mahindra’s expansion strategy has always been a step by step process, with careful planning and investment.
The company currently operates a semi knocked down (SKD) assembly plant for its Pik Up range at the Dube TradePort special economic zone in Durban.
The facility, outsourced to Automotive Investment Holdings (AIH) Logistics, has reached a production milestone of 25,000 locally assembled vehicles.
The study will also consider logistics, potential assembly locations, and how Mahindra can align with South Africa’s transition to new energy vehicles (NEVs).
“We started with 200 units per month at our SKD facility six years ago, and today we are assembling nearly 1,000 units monthly,” Gupta said. “A new facility we are commissioning in mid-2025 will increase this to about 1,500 units per month.”
Mahindra showcased its next generation Global Pik Up in Cape Town in August 2023, signaling South Africa’s growing role in its international strategy.
The company is now considering whether the country could become a long term manufacturing base outside India.
“If everything aligns, this is the right time to investigate our next steps and deepen our commitment to South Africa’s industrialisation and automotive sector,” Gupta said.
Corrie Kotze, CEO of AIH Group, described Mahindra as a strong candidate for CKD assembly in South Africa.
He noted that the transition from SKD to CKD would create jobs and allow the company to benefit from the Automotive Production and Development Programme 2 (APDP).
“They can’t have all their operations in India. If they want to grow internationally, setting up a plant outside India makes sense,” Kotze said.
IDC acting divisional executive for industry planning and project development Rian Coetzee added that the feasibility study aligns with South Africa’s Automotive Master Plan 2035, which aims to strengthen the country’s competitiveness as an assembly location.
“Depending on the study’s outcome, there is significant potential for Mahindra to increase production in South Africa, which could lead to job creation and industry growth,” Coetzee added.
