Mahindra & Mahindra (M&M), utility vehicles manufacturer, is likely to come up with an automotive plant and a testing facility in Tamil Nadu.

The company will invest around Rs 2,000 crore for setting up this project, but is uncertain about the amount, as the full-fledged automotive plant will go beyond the committed investment since such a plant costs more than Rs 2,000 crore.

Mahindra & Mahindra is likely to sign an MoU with the Tamil Nadu government soon. Although work on the project had already begun in 2011, the future of the project is still a doubt as land has not yet been allotted to the company which is awaiting approval for the same. The MoU is expected to be signed by the Tamil Nadu government by the end of December 2013.

The plant will come up on about 400 acre at Cheyyar in South Tamil Nadu where earlier there were plans to build a tractor facility, which will now be used as a testing ground and for an automotive plant.

Since the MoU was delayed, the tractor plant was set up at Zaheerabad in Andhra Pradesh. The company has invested over Rs 300 crore in its Andhra Pradesh facility, which has a production capacity of about 100,000 tractors a year.

The automotive plant will cater to both, domestic and export markets. As soon as land is allotted, the testing facility will be built so that engineering, testing and production work can be undertaken.

The company has already invested around Rs 600 crore in the Mahindra Research Valley (MRV) which is located on the outskirts of Chennai.

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