Mahindra & Mahindra Ltd. is at an advanced stage of assessing plans to upgrade its South African plant, aiming to capitalize on rising demand for affordable vehicles.
The company is working with the state-owned Industrial Development Corp. to assess the feasibility of setting up completely knocked-down, or CKD, production at its facility near the port city of Durban.
This move may help Mahindra sidestep potential import tariffs and compete with Chinese and Indian rivals that have eaten into the market share of companies including Ford Motor Co. and Mercedes-Benz Group AG.
Representatives for the Mumbai-based company and IDC didn't immediately respond to requests for comment.
The plan may also help Mahindra boost sales and compete with companies including Chery Automobile Co. and Suzuki Motor Co., which ship most of their cars from India.
Chery, China's top car exporter, earlier this year agreed to buy Nissan Motor Co.'s plant in South Africa, while Mercedes is considering sharing its manufacturing plant in the nation with Great Wall Motor Co.
