Mahindra hints at Aussie manufacturing revival

The Australian automotive manufacturing industry is heading for a fall in 2017, and the vehicle assemblers will certainly take at least some parts manufacturers with them. But perhaps there's a white knight on the horizon – in the form of Indian conglomerate Mahindra.

Anand Mahindra, chairman of the giant corporation, recently told carsales.com.au Chief Product & Information Officer Ajay Bhatia that Mahindra is interested in any opportunities the folding local industry might offer – in terms of picking up talent, technology or processes.

"Since I have come here I have realised there is a great deal of angst and unhappiness [at] the unwinding of the car industry," he said.

"Maybe a company like Mahindra is the one that can re-kindle investments and use the resource; the challenge of course is the high cost of manufacturing here. But what I have learnt from this trip is it’s definitely a productive and innovative economy [in Australia]."

An Indian company could be the ideal parent for a local manufacturer if able to leverage other assets around the region. In Mahindra's case that could include Korean brand SsangYong.

The now defunct transmission manufacturer DSI, based in Albury, previously supplied transmissions to both Mahindra and SsangYong, and the Aussie company's transmission designs are still being produced by Geely in China.

Mahindra already has boots on the ground in Australia, with over 1000 staff working for the company in the field of IT. Its acquisition of SsangYong, and the encouraging results for fellow traveller Tata with that company's two best known properties (Jaguar and Land Rover) could be the impetus Mahindra needs to scope out the Australian market for the rich pickings on offer once Ford, Holden and Toyota cease production here.

By Anand Mahindra's admission, the company is planning to be a major player on the world's stage.

"We certainly have global aspirations; no car company today can bury its head in the sand. And it has to look internationally, not just for volume, but also because of the technology process of doing business [in] of variety of areas..."

According to Mahindra, the acquisition of SsangYong was: "an easy acquisition for us, because it’s the Mahindra of Korea."

That's not to say, however, that Mahindra is satisfied with ending its global expansion with that one acquisition – or that Mahindra would only target brands that fit the Mahindra mould as it is.

"We [are] continually looking at brands but these will be opportunistic as they happen."

It's unlikely, however, that we'll see large-scale manufacturing resume in an Australian plant with a Mahindra sign over the door. The Abbott government is currently engaged in dialogue with the Indian government, working towards a free trade agreement between the two countries. Any vehicle built in India for export to Australia once the FTA is in force, would be landed here without incurring the five per cent import tariff that current applies to passenger and commercial vehicles from abroad.

According to Mahindra, both countries are keen to implement the FTA.

"I was at a meeting with [Indian prime minister Narendra] Modi and Mr Abbott and there were plans being discussed to do this within a year if not much less than that," the conglomerate's boss stated.