NEW DELHI: Mahindra CIE Automotive, the automotive components division of Mahindra Group, has closed its manufacturing plant in Germany as part of its European transformation strategy.

Mahindra CIE Automotive’s German subsidiary, Mahindra Forgings Europe (MFE), has decided to close its subsidiary in Gevelsberg Jeco in north-west Germany, Jellinghaus Gmbh, in the next six months, Mahindra CIE Automotive has said in a filing to the BSE. Jellinghaus Gmbh.

Jeco Jellinghaus continues to face pressure on profitability due to unstable market demand and internal inefficiencies.

The document adds: “We have therefore decided to phase out Jeco over the next six months by transferring machinery and equipment to other MFEE manufacturing sites and outsourcing the majority of our machining operations.”

Jeco’s announced closure affects approximately 160 every job.

For the time being, Jeco’s future supported customers will start sourcing products from MFE’s other manufacturing plants. The company said the restructuring is unlikely to have a significant impact on MFE’s sales or profitability this year.

MFE It is one of the largest suppliers of forged and machined components to the European commercial vehicle industry, with six locations in Germany.

The company has been under pressure to make profits for a long time and management has developed a strategy to turn it around.

In the first phase of our turnaround strategy, the focus was on streamlining costs through operational efficiencies, selective pricing, use of power subsidies, outsourcing of simple operations, and reducing overtime and contract labor costs. Over the last 12 to 15 this month has been successful. Profitability has improved. In the second phase, management will focus on optimizing manufacturing locations and product mix to further improve operational efficiencies.