Utility and tractor giant Mahindra and Mahindra will set up a utility assembly plant in Manuas, North Brazil, with local partner Bramont. The plant is expected to be commissioned by early November this year.

M&M will assemble 5,000 completely knocked down kits of Scorpio and pick-up trucks in this plant per annum. This would eventually be scaled up to its full capacity of 10,000 units a year.

"The investment will be made by our Brazilian partner Bramont, which will be $10 million in the first phase, while we will provide the necessary technical support," Pravin Shah, executive vice-president, international business, M&M, said.

Bramont will appoint 30 dealers in the first year of its operations, Shah added.

"Brazil is a vital market for M&M. Out of the current four-wheeler market of 2 million units in the country, 12 per cent belongs to sports utility vehicles. Unlike the European or the US markets, where the vehicle market is saturated, in Brazil and other Latin American countries, it is growing in double-digits," said Shah.

In 2006, the Latin American four-wheeler market was estimated to be at 3.3 million units, growing 20 per cent annually.