Mahindra & Mahindra has put its plans to acquire a design firm based in Detroit, US, on the backburner.
M&M planned to acquire and use the $5 million automotive design company as its front office in the US.
The company, however, decided against going ahead with the deal as valuations in the US have of late been affected by a state of over-capacity in the design industry.
Meanwhile, senior company executives said M&M would continue to look at acquisitions, and may include other targets in the US and Europe.
"The acquisition that we were looking at last year has been put on the backburner due to current market conditions in the US. But the deal is only on hold, and has not fallen through," Pawan Goenka, chief operating officer of M&M's automotive division, said.
"We continue to be on the lookout for acquisitions and are currently looking at small-to-medium sized design firms in the US and Europe," he added.
Without revealing any numbers, Goenka said M&M had a budget in mind for the acquisition, but it was "not cast in concrete".
"If we come across a promising deal, we may even stretch our budget," he said.
Meanwhile, M&M's automotive division has carved a separate unit out of Mahindra Engineering Services, its in-house design team, with effect from April 1.
This may be viewed as a prelude to spinning off the division into a separate company in the future.
"We may consider spinning it off into a separate company in future, but only time will tell if there is a need for that," Goenka said.
The in-house division, which began operations a few months ago by executing design orders for non-critical components for clients in the US, has more recently bagged orders from an unidentified Japanese company for designing engine components.
It has also designed the interiors of a vehicle for a European manufacturer, Goenka said.
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