For the first time in 25 years, a new automotive assembly plant has opened its doors in Detroit. But it wasn’t General Motors or Ford cutting the ceremonial ribbon November 20. Mahindra & Mahindra, the Mumbai-based manufacturing giant that started out producing tractors for Indian farmers, has put down roots in the place known as “Motor City.”
Drawn by engineering talent, Mahindra & Mahindra plans to double its existing $1 billion investment in the U.S. during the next five years. The new Detroit plant is a central component of that initiative.
“It is a situation of reversal where an Indian company is going to the U.S.” said Pawan Goenka, managing director of Mahindra & Mahindra.
The plant builds off-road utility vehicles developed by American engineers at the Mahindra North American Technical Center in Troy, Michigan, home to the company’s global automotive research and development operations.
Mahindra & Mahindra first came to Michigan in 2013, looking to advance its passenger vehicle line. When the caliber of engineering talent the company needed could not be found in India, it looked to the car capital of the world, Detroit, for a pool of recruits from Toyota, Ford and other major players. Labor costs are higher in the United States, but the company says they are mitigated by the high level of expertise possessed by Detroit’s workers. Product development and testing are done faster in the U.S.
“It’s a great example of how global connections matter to the United States,” said Nancy McLernon, chief executive of the Organization for International Investment, an independent association of international companies in the United States.
“When we think of global connections, a lot of folks put on their consumer hat and think of going to Walmart,” McLernon said. “But this is about how global connections provide a paycheck.”
Mahindra & Mahindra Executive Chairman Anand Mahindra said his company is thrilled to be doing business in the United States.
“We are very, very big believers in America and in its talent. We are going to double our bets in America,” Mahindra said when announcing the company’s expansion plans. “This will contribute to the growth of the U.S. economy.”