Mahindra & Mahindra to Build Off-Road Vehicles in Michigan
November 20 2017 - 11:47AM
Dow Jones News
By John D. Stoll
Mahindra & Mahindra Ltd., an Indian auto and tractor maker,
plans to build rugged off-road vehicles at a small factory north of
Detroit, a potential step toward the company's bigger goal of
selling cars in the U.S.
The move, announced Monday, is expected to result in more than
100 new production jobs and provides the latest example of a
foreign auto company deepening its U.S. roots. Auto sales have
boomed in recent years, leading companies as big as Toyota Motor
Corp. or as unknown as Chinese windshield maker Fuyao Glass
Industry Group, to commit billions in new investment at a time when
domestic players are tempering growth.
Mahindra has a large presence in the U.S. tractor market but is
unknown to most car buyers. Its rugged utility vehicles sell mostly
in emerging markets and its other auto brands, including South
Korea's Ssanyong Motor, don't sell to American consumers. In an
interview, Chairman Anand Mahindra said the company is considering
several ways to expand in the U.S., including electric cars or
Ssanyong imports from South Korea.
The off-road vehicle to be built in Auburn Hills, Mich., isn't
aimed at the more-than-17-million people who buy light trucks or
cars annually. Instead, the rugged utility vehicle will be limited
to 45 miles an hour and compete in a segment catering to people
needing an off-roader for tasks on private property or roadways not
heavily used by passenger vehicles.
Still, the small factory win for Michigan at a time when Ford
Motor Co. and General Motors Co. are cutting back on certain parts
of the workforce and trimming production at plants that build
slow-selling sedans or compact cars. State officials have courted
non-U.S. companies to fortify a local car industry considered the
automotive capital of the world.
American manufacturing, meanwhile, has picked up pace over the
last 12 months thanks to steady global economic growth, a rise in
energy and other commodity prices, and increased business
confidence. U.S. manufacturers have added 156,000 workers since
Donald Trump was elected president in November 2016, according to
government data.
Mr. Mahindra said the company is "very happy that
(manufacturing) is going to be supported strongly," by potential
tax policy changes and other policy positions, but he said Mr.
Trump's election "has nothing to do with our decision...I've been
talking up the U.S. for a longtime."
Mahindra & Mahindra first started investing in Michigan a
few years ago, locating dozens of engineers in suburban Detroit.
Other foreign-backed companies, including China-owned Nexteer, have
been growing in the state.
"We're serious about courting Asian investment, global
investment in Michigan," Tracie Tillinger, a business-attraction
official with the Michigan Economic Development Corp., said Monday.
State officials are using a combination of customized incentives
and existing legislation to lure firms searching for engineering or
manufacturing space.
Michigan has remained a hub for automotive engineering and
development, but its role in U.S. car manufacturing has faded in
recent years. Detroit's so-called Big 3, including Fiat Chrysler
Automobiles NV, now produce only half the cars and trucks built in
the U.S. -- most of the new auto factories built in America since
the 1980s belong to foreign car companies locating in the
South.
Numbers provided by the Organization for International
Investment indicate foreign-owned companies have had a
disproportionate role in the auto industry's rebound from the
financial crisis. The organization says 411,000 people work in the
auto industry and are employed by foreign firms, representing
nearly half of the sector's employment, according to the Bureau of
Labor Statistics.
The current number of auto-industry employees working for
foreign firms is up 43% compared with 2010, meaning non-U.S.
companies have provided a substantial portion of the total growth
in the sector during the decade.
Write to John D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
November 20, 2017 11:32 ET (16:32 GMT)
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