SML Mahindra to acquire M&M's truck, bus business for unified CV company

Mumbai: SML Mahindra agreed to acquire Mahindra & Mahindra's (M&M) truck and bus division, bringing the group's commercial vehicle operations under a single entity as it looks to bolster its presence in this highly competitive market dominated by Tata Motors and Ashok Leyland.

The transaction, approved by SML Mahindra's board Wednesday, is expected to be completed this fiscal year. The value of the deal wasn't disclosed.

It follows M&M's purchase of a controlling stake in the erstwhile SML Isuzu last year and is aimed at creating a unified commercial vehicle business spanning light, intermediate and heavy trucks as well as buses, according to the conpany executives.


Manufacturing of Mahindra-branded trucks and buses will continue to be undertaken by M&M under a contract manufacturing arrangement after the transfer, ensuring continuity of operations.

Speaking to reporters after the announcement, Rajesh Jejurikar, executive director and CEO, auto and farm sector at M&M, said the combined business would unlock synergies across manufacturing, technology and customer-facing operations while preserving the distinct positioning of the Mahindra and SML brands.

He said M&M didn’t see value in introducing another brand in heavy commercial vehicles and would instead continue with the Mahindra brand in the segment.

The company is evaluating capital expenditure plans for SML Mahindra covering capacity expansion, latest technologies, and entry into wider product segments, said Jejurikar, adding that the details would be announced later.

He said the combined enterprise would benefit from operating leverage, procurement gains and other synergies that would more than offset the impact of the contract manufacturing model.

SML Mahindra currently has an annual production capacity of about 34,000 truck chassis and 1,000 buses, and plans to expand its sales and service network as the integration progresses. The company also expects technology, including AI- and machine learning-based remote diagnostics, to play a larger role in improving vehicle uptime and after-sales support.