Utility major Mahindra & Mahindra Ltd has firmed up plans to expand the manufacturing capacity of its newest Sports Utility Vehicle (SUV) XUV 500 at its Chakan manufacturing base located near Pune in Maharashtra.

The automotive company, which has a capacity to produce up to 2,500 XUV 500 vehicles per month, is initially looking at increasing the capacity to 3,000 vehicles per month to meet the growing demand in the domestic market.

“Due to increasing demand, we are also going slow on exports, particularly to South Africa,” Mr Arun Malhotra, Senior Vice-President, Sales and Customer Care, Mahindra & Mahindra, said.

Speaking to newspersons after the launch of Mahindra XUV 500 in Andhra Pradesh, Mr Malhotra said that the company received an overwhelming response for the SUVs in October 2011 in the five cities it launched with over 8,000 bookings. This necessitated the company to close the bookings.

“After we meet this demand, we have decided to cover 19 cities in the second round of bookings to be open later this month. Even if were to expand capacity, it would not be easy to ramp up as suppliers would have to meet the demand. The company has enlisted the services of consultant Deloitte to guide it through the booking process, which would provide the right approach for allotments,” he said.

“Priced at Rs 11.2 lakh and Rs. 12.57 lakh ex-showroom, respectively in Hyderabad, we have managed to woo buyers from different categories,” he said.

Referring to the company business, Mr Malhotra said during the first nine months of April-December 2011, M&M auto division has grown by about 26 per cent and the SUV segment by about 16-17 per cent in spite of relative tough business environment.

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