Mahindra Sona to invest Rs. 40 crore to expand facilities.

Mumbai-based Mahindra Sona Ltd., in which Mahindra & Mahindra (M&M) holds a 30 per cent stake, will invest about Rs. 40 crore for expansion of its facilities in the current financial year.

The auto-parts manufacturer plans to invest Rs. 20-25 crore in the first phase to set up an assembly facility for propeller shafts at Pithampur in Madhya Pradesh. It will invest Rs.12-15 crore to expand its Nashik unit and Rs. 8 crore for upgradation of machinery.

“We have recently acquired a 2.5-acre plot in Pithampur, and this would serve as an extension of our current Nashik facility. At Nashik, we are expanding our range of products and will foray into manufacturing of clutches for heavy duty vehicles,” Gaurav Motwane, Managing Director, told BusinessLine.

With a drop in interest rates and fleet owners looking to upgrade their fleet to comply with the new emission norms, “we expect vehicle sales to go up,” Motwane said, adding, the company has already made “significant” investments in testing and R&D.

Mahindra Sona is a joint venture between M&M and Sona Group, with the latter holding about 37.5 per cent stake. IL&FS Financial Services holds about 6 per cent, Khattar Holdings about 13 per cent and the remaining by certain individual investors. The automotive parts manufacturer will fund the expansion plans through debt and internal accruals, its Chief Financial Officer Pradeep B Mestry said.

The company was carved out of M&M in 1995 and spun off into a new company, when the auto-maker decided to concentrate on its core business.

The company makes propeller shafts for rear wheel-driven vehicles and clutch assemblies at its Nashik plant for the domestic market, and machine components for the North American markets.

HBL