Mahindra’s bakkie factory in South Africa is running smoothly, and the brand has big plans to expand its presence in our market in the near future.
The Indian carmaker has a facility in the Dube TradePort Special Economic Zone, located on the outskirts of Durban in KwaZulu-Natal.
This site produces the Pik Up bakkie, which is assembled from semi-knock-down (SKD) kits imported from India.
This is an operation where most of the vehicle’s complex components are made in the original facility in India, which are then brought to South Africa for the final assembly process.
Back in March, Bloomberg reported that several South African original equipment manufacturers (OEMs) are lobbying the government to end support for SKD operations, which would understandably have a major impact on Mahindra’s operations.
TopAuto has since been in contact with Mahindra to learn more about the company’s position in South Africa and its future plans for our market.
Mahindra South Africa’s CEO Rajesh Gupta was kind enough to meet with us one morning to discuss the ramifications of a potential end to SKD support.
Gupta explained that such a move would be discouraging to foreign automakers, and that South Africa should be doing as much as it can to encourage local investment and manufacturing.
Mahindra’s factory in KZN is not capable of full manufacturing, but it nevertheless represents a massive investment that supports hundreds of local jobs directly and indirectly at various points in the supply chain and dealer network.
The Pik Up has also emerged as one of the most popular bakkies in the country, regularly placing fourth on each month’s best-sellers list after the Toyota Hilux, Ford Ranger, and Isuzu D-Max.
Mahindra’s CEO explained that the site is doing phenomenally well and that the company’s next goal is to work its way up to completely-knocked-down (CKD) operations.
This is a notable step up, as an CKD process means every part is shipped separately and the full assembly is done in the destination market.
It also requires more trained personnel, translating to additional job opportunities for locals.
Gupta mentioned that a possible reason why other OEMs dislike SKD operations and are allegedly looking to end state support for it is that, in their eyes, it represents a much smaller investment than what other companies have already committed to our market.
He added that SKD operations should rather be viewed as a stepping stone towards future expansion, as it is unrealistic to expect all new carmakers to commit to full manufacturing right off the bat.
Mahindra’s next steps in South Africa
We asked Mr Gupta whether the company has ambitions to eventually upgrade to full manufacturing, but he said that this is beyond their scope for the time being.
He explained that Mahindra is taking a slow but steady approach to its growth in South Africa and is prioritising sustainable development over rapid but risky expansion.
This strategy has evidently paid off thus far, as Mahindra has grown to become one of the top 10 best-selling car brands in South Africa over the last few years.
Much of this growth can be attributed to two models, the Pik Up bakkie, and the XUV 3XO crossover.
The latter is one of the most popular entry-level passenger cars in the country, often selling over 1,000 units per month.
Given the 3XO’s success, we asked whether Mahindra had considered local assembly operations for the crossover, but Gupta said that, for now, the company is focused on the Pik Up.
He noted that there is tremendous potential in South Africa’s bakkie market and the carmaker plans to double down on the Pik Up in the near future.
The CEO revealed that Mahindra plans to launch the new Global Pik Up in South Africa next year.
This new version of the bakkie will share a platform with the Scorpio-N Adventure SUV and is expected to be a far more premium product than the one we have now.
That being said, a spokesperson for Mahindra told TopAuto that the company will almost certainly keep the old models around as a more affordable alternative for consumers and business fleets.
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