India's Mahindra says not pursuing Hummer

MUMBAI Mon Aug 18, 2008 4:55pm IST

Related Topics

Stocks

   

MUMBAI (Reuters) - Mahindra & Mahindra Ltd (MAHM.BO), India's top utility vehicle maker, is not interested in buying General Motors' (GM.N) Hummer brand, but will instead focus on its own models for the key U.S. market, a senior official said.

"There has been a lot of speculation. I want to say categorically we are not pursuing Hummer," Vice Chairman Anand Mahindra said at a news conference.

"We are pursuing our own models strategy and we do not want to tarnish our lean warrior strategy," he said, referring to Mahindra's plans for a line-up of eco-friendly vehicles.

Earlier on Monday, a source told Reuters China's Hunan Changfeng Motor Co 600991.SS had held preliminary talks with General Motors, and that the Chinese sport utility vehicle maker had backed off, underlining the difficulty the U.S. firm faces in offloading the gas-guzzler at a time of high fuel prices.

GM, also struggling against a downturn in the North American auto market, has explored a sale of Hummer with potential buyers in Russia, as well, sources have said.

Russian billionaire Oleg Deripaska's car unit, Russian Machines, last week also denied it was seeking to buy Hummer.

Mahindra, which earlier this year lost the race to buy the Jaguar and Land Rover luxury brands to larger rival Tata Motors Ltd (TAMO.BO) (TTM.N), plans to launch a small pickup truck and an SUV in the U.S. market, starting in the second half of 2009.

Mahindra declined to comment on whether the company would stick to its timeline for these launches, given falling sales of pickup trucks and SUVs in the U.S. market.

CHINA TRACTOR JV

Mahindra, also India's top tractor maker, said on Monday it would take a 51 percent stake in a joint venture with Chinese tractor maker Jiangsu Yueda Yancheng Tractor Manufacturing Co, taking it a step closer to claiming top spot in the world.

Mahindra, which already makes tractors in China through Mahindra China Tractor Co. Ltd, a venture with Jiangling Motors Co Group, will invest about $26 million in the venture, which will acquire Yueda's tractor operations for $50 million.

"The formation of this joint venture is a significant step in our plans for the China market," Anjanikumar Choudhari, president of Mahindra's farm equipment sector, said in a video conference.

"Along with our current operations, we will have a much larger scale and a cost-effective manufacturing base on which to build up our business in China and for overseas markets."

Yueda is No. 3 in the Chinese market, the fastest growing market for tractors, and one where consumers are shifting to more powerful tractors, Choudhari said. Yueda's portfolio of tractors from the 16-125 hp range will help address the demand.

Mahindra will consider merging its China operations at a later date, he said, without giving more details.

Mahindra, which last month bought the assets of motorbike and scooter maker Kinetic Motor KNTM.BO, will have a capacity of about 170,000 tractors with the new venture, which will bring it very close to leader Deere & Co (DE.N), if not overtake it.

"For a long time the Mahindra Group has aspired to become the No. 1 tractor manufacturer in the world," Mahindra said.

"I believe, with our new alliance, we would be able to achieve that goal more rapidly."

Shares in Mahindra, which has a market worth of $3.2 billion, ended down 2.6 percent at 568.10 rupees in a weak Mumbai market.

($1=43.3 rupees)

(Reporting by Rina Chandran; Editing by Ranjit Gangadharan)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

BACK IN JAIL

REUTERS SHOWCASE

Modi Hurdle

Modi Hurdle

Appointment of Arvind Subramanian as chief economic adviser hits Modi hurdle.  Full Article 

USL Board

USL Board

Diageo bars United Breweries from appointing independent director at United Spirits.  Full Article 

Amazon in India

Amazon in India

Amazon to sell packaged food and beverages in India - Economic Times.  Full Article 

iOS 8 Issue

iOS 8 Issue

iOS 8 causing Bluetooth connectivity issues - Apple news blog  Full Article 

NYT Job Cut

NYT Job Cut

New York Times to cut jobs as new products disappoint  Full Article 

Factory Activity

Factory Activity

Factories expand at slowest pace this year in September  Full Article 

Monetary Policy

Monetary Policy

RBI not biased towards either raising or cutting rates - Rajan  Full Article 

Weak Demand

Weak Demand

Weak demand hits factory activity across Asia, Europe  Full Article 

Pimco Fund

Pimco Fund

Pimco Total Return Fund posts record $23.5 bln net outflow in Sept  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage