In its first joint venture for tractors abroad, Mahindra & Mahindra has entered into a memorandum of understanding with Jiangling Motor Company Group of China to acquire the latter's tractor manufacturing assets.
The Indian utility and tractor manufacturer is to pump in $8 million into the joint venture and hold 80 per cent stake in the company which had a turnover of $700 million last year, an M&M spokesman said on Tuesday.
The value of the joint venture is estimated at $10 million.
The planned joint venture will acquire assets from Jiangling Tractor Co, a subsidiary of JMCG, which has a capacity of 12,000 tractors per annum, he said.
Jiangling Tractor would provide the joint venture with a strong manufacturing base, an existing distribution network in China and a complementary product range, he added.
As part of its overseas growth strategy, M&M has already test marketed its products in Hanianan province, he said.
An M&M team headed by vice chairman and managing director Anand Mahindra is in Nanchang in Jianixi province where the plant, which employs around 350-400 workers, is located.