Mahindra China JV to build R&D center, engine plant

Shanghai, December 22 (Gasgoo.com) India's largest farm-equipment and tractor maker Mahindra & Mahindra yesterday said its joint venture with China's Yueda Group will invest US$40 million to set up a new R&D center, engine plant and in modernizing its tractor unit in Yancheng, media reported.

Mahindra last year formed a joint venture with China's state-owned Jiangsu Yueda Group to make tractors for the Chinese and global markets. The Mumbai-based company holds a majority 51% stake in the joint venture, while the remaining 49% is held by its Chinese partner.

The modernization will consolidate joint venture Mahindra Yueda Tractor Co.'s manufacturing operations and improve productivity and quality, Mahindra said, adding that $18 million of the total investment will be used to build the R&D center and an engine plant, with the rest for upgrading the JV's factories.

Mahindra Yueda's tractor plant at Yancheng currently has an annual production capacity of 38,000 units, ranging from 16 horse power (HP) to 125 HP. Mahindra has three tractor manufacturing plants in China. Its joint venture with Jiangling Motors has operated since July 2005. 

The new investment will help Mahindra Yueda Tractor Co increase its presence in China's agricultural machinery market, said Yueda Group, which is also a Chinese partner of S. Korean carmaker Kia Motors.