Mahindra & Mahindra (M&M) is planning to set up an automobile plant at Cheyyar in Tamil Nadu on 550 acre at a cost of about Rs 1,500 crore.

The Tamil Nadu Government is planning to acquire over 2,400 acre at Cheyyar for various investments in the pipeline. According to sources, the state government, which has over 255 acre for a proposed automobile park at Cheyyar, is likely to earmark the land for M&M's automobile project while the remaining land is also being acquired.

The Mahindra Group had earlier planned to co-locate its utility vehicle and tractor production facility as a part of a JV with Renault-Nissan at Oragadam near Chennai. In February 2007 the three partners entered into an MoU with the state government for a Rs 4,000 crore integrated automobile production facility with a capacity to produce four lakh units per annum and 50,000 tractors.

Later, in 2008 the Mahindra Group took an exit from the JV and decided to go it on its own. It had said that its commitment to set up a facility in Chennai stands, including the Rs 500 crore Mahindra Research Valley project, which is coming up within its SEZ at Mahindra World City.

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