Mahindra Invests in South Korean Unit

India's Mahindra & Mahindra Ltd. and its South Korean unit SsangYong Motor plan to jointly invest $900 million over the next five years to develop three new vehicle platforms and six engines.

Pawan Goenka, president of Mahindra's auto and farm equipment unit, tells reporters that the initial phase one platform and its engines has already been decided. Goenka, who also is SsangYong chairman, says the project will be funded by a combination of internally generated cash, new loans and fresh equity.

The new program is separate from the three-year, 50 billion-rupee ($911 million) investment in Mahindra vehicles the company launched last year. It is unclear whether the SsangYong investment is part of the $2 billion Mahindra pledged to spend on the Korean SUV maker when it acquired a 70% stake in 2011.

SsangYong said then that Mahindra would help it to boost global sales to 300,000 vehicles in 2015 from 82,000 in 2010 by expanding in such markets as China and India.