Indian automaker Mahindra has signed a Memorandum of Understanding (MoU) with South Africa’s Industrial Development Corporation (IDC) for an in-depth feasibility study on the potential establishment of a Completely Knocked Down (CKD) vehicle factory in the country.
At present, Mahindra assembles the Pik Up on local soil at a semi-knockdown (SKD) plant located in the Dube Tradeport Special Economic Zone in Durban, KwaZulu-Natal.
SKD refers to when a fully built vehicle is shipped from overseas in boxes and put together on local soil. Meanwhile, CKD is when a vehicle is built from scratch in one factory.
Mahindra celebrated the production of its 25,000th locally assembled SKD Pik Up on 24 February 2025, coinciding with the big announcement.
Should the company go ahead with the ambitious plan, it will join the likes of esteemed nameplates such as BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota, and VW, who all have CKD operations within our borders.
Mahindra’s domestic subsidiary is also in the process of increasing its production capacity at its SKD facility operated by AIH Logistics, underscoring the company’s growing presence and long-term commitment to the South African market.
No commitments at this point
Rajesh Gupta, CEO of Mahindra South Africa, notes that the MoU marks a significant step in evaluating the potential for expanded local manufacturing, with a detailed study set to examine key factors such as automotive industry incentives, export market potential, workforce development, and supply chain infrastructure.
Additionally, the study will assess logistics and supply chain feasibility, including potential locations, to determine how Mahindra can further integrate into the country’s industrial landscape, including new-energy vehicles.
“Reaching the milestone of our 25,000th locally assembled Pik Up is testament to Mahindra’s growing footprint and long-term commitment to South Africa,” said Gupta.
“As we continue to strengthen our operations, this MoU allows us to explore the feasibility of expanding our local assembly capabilities. This study will provide valuable insights into the potential for deeper integration into South Africa’s automotive landscape while supporting the country’s industrial growth objectives.”
While this MoU signals Mahindra’s intent to explore local manufacturing opportunities, the automaker emphasises that it is purely an evaluation.
“No commitment has been made toward establishing a CKD facility at this stage,” said Gupta.
The study will allow Mahindra South Africa and IDC to make an informed assessment before any future decisions are taken.
“Mahindra’s commitment to ramp up its feasibility study in South Africa aligns with the objectives of the South African Automotive Master Plan 2035 whose focus is to strengthen the competitiveness of South Africa as an automotive assembly location,” said Acting Divisional Executive for Industry planning and project Development at the IDC, Rian Coetzee.
“Depending on the outcome of the feasibility study, there is great potential for the company to increase its production output in South Africa – a factor that has potential to create employment opportunities.”
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