Utility vehicle and farm equipment major Mahindra & Mahindra Ltd today announced that its joint venture with China's Yueda group - Mahindra Yueda (Yancheng) Tractor Company (MYYTCL) - will invest $40 million (Rs188 crore) to set up an R&D centre in China.
The money will be used in its engine manufacturing plant and for modernisation of new production facilities for tractors at MYYTCL, M&M said in a release.
The announcement was made after a meeting between Anand Mahindra, vice-chairman and managing director of Mahindra Group, and Cao Youhu, vice-mayor of Yancheng City, and Chen Yunhua, chairman of the Yueda Group, in Mumbai.
Out of the total $40 million investment, $18 million will go to the engine R&D centre and the rest to the manufacturing plant. MYYTCL will use the investment for developing reliable and fuel-efficient engines for the China market, which, the company said, will improve its competitive advantage in China.
The modernisation of tractor plant will also improve productivity and quality and consolidate the Yancheng manufacturing operations, it said.
MYYTCL's effort to set up an R&D centre and engine facility and develop the tractor plant at the new industrial zone has been encouraged and supported by the Yancheng government, the release said.
"Fuel efficient and reliable engine technology will help to lower emissions and carbon footprint. I compliment the Yancheng City government and Yancheng Economic Development Zone in encouraging industry and supporting MYYTCL and the investment in research initiatives," Anand Mahindra said.