Mahindra & Mahindra has signed a long-term agreement with Bavarian Auto Trading Company, an Egyptian automobile manufacturer and trader, for setting up a completely-knocked-down assembly unit in Egypt.

M&M has already made inroads into Egypt's tractor market by exporting products from its Jiangling plant in China.

"The CKD unit will be set up by the end of the year. The entire investment for setting up the plant will be made by the Egyptian partner," said Pawan Goenka, president (automotive), M&M.

The unit will make Scorpio and Bolero utility vehicles and pick-ups for the local and neighbouring markets. Bavarian will be responsible for the distribution and after-sales of Mahindra vehicles in Egypt.

"Initially, the venture will target the Egyptian market. The idea is to eventually use Egypt as a base for the neighbouring markets," said Goenka. The market for utility vehicles and pick-ups in Egypt is estimated at 50,000 a year.

According to industry sources, M&M's Egyptian facility should roll out 2,000 units in the first year of its operations. Bavarian Auto, one of the leading vehicle-makers in Egypt, is also assembling and selling cars for BMW and a few Chinese car-makers.

Egypt, like the neighbouring West Asian terrain, is ideal for use of utility vehicles and pick-ups. M&M already exports its vehicles to West Asian markets including UAE, Qatar, Kuwait and Oman.

The other global markets for M&M include South Africa, Europe and Uruguay. M&M does not sell pick-ups in India.

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