Mumbai : Auto major Mahindra & Mahindra, will invest Rs 4,000 crore over a 7-year period to expand its existing facility at Chakan in Maharashtra.

The company, which had earlier put on hold the expansion at the plant and considered other options citing lack of support from the Maharashtra government, said the fresh infusion would take its total investment in Chakan to Rs 8,000 crore.

"A total of Rs 4,000 crore will be utilised towards infrastructure development, product development and capacity expansion for vehicles to be rolled out from the Chakan plant," Mahindra & Mahindra said in a statement.

A joint declaration was signed today between the company and Maharashtra Government, in the presence of state Chief Minister Prithviraj Chavan.

Mahindra Group Chairman Anand Mahindra said Maharashtra government's visionary industrial policies and efficient governance practices have prompted the company to to take the decision to scale up the Chakan plant.

Commenting on the development, Mahindra & Mahindra Executive Director Pawan Goenka said: "We are delighted to announce the next phase of our expansion plans at Chakan and would like to thank the Govt of Maharashtra for their continuous and unstinted support.

"I am sure that with this expansion, Mahindra will continue to play an integral part in the development of not only the region of Chakan but the state of Maharashtra, as well as the Indian auto industry in times to come," he added.

Earlier, the company had decided to put on hold all investment at its Chakan plant due to VAT refund issues with Maharashtra Government.

The plant at present has an annual capacity to roll out 3.2 million and currently manufacture M&M's entire medium and heavy commercial vehicle range, including the 0.75 tonne Maxximo, Single and Double Cab Pik-Ups and the whole new range of Mahindra Trucks and SUV XUV 500 besides assembling SsangYong Rexton.

Besides Chakan, the company also has manufacturing plants at Nashik and Haridwar. Last year, Mahindra had announced to invest Rs 10,000 crore in the next three years on capex and launching new products.

As part of overall capex, the company is developing two-three new platforms for brand new products which will hit the market around FY 2016.

The company is also working on six new engines out of which three will be from Mahindra and Mahindra and three from Sangyong. Mahindra and Mahindra is also working on smaller engines with higher power.

(PTI)