China 's burgeoning auto market is attracting foreign companies, the latest of which is Mahindra & Mahindra, India's largest SUV maker.

The Indian company is reportedly looking for a partner for its China venture, particularly for manufacturing and selling electric vehicles in the country.

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Mahindra & Mahindra's EV unit, Mahindra Reva Electric Vehicles Pvt. Ltd., currently sells its vehicles in Indian subcontinent and in the UK. 

Amid its interest in the Chinese market, it has been predicted that Mahindra & Mahindra is likely to face stiff competition from Chinese companies in the EV sector, some of which are backed by tycoons such as Jack Ma and Terry Gou.

Meanwhile, it is worth noting that China is looking to have five million electronic vehicles in the country by 2020. Therefore, the Indian auto-maker may find it feasible to set up a manufacturing unit in China as imported vehicles attract 25 percent duty.

Furthermore, these vehicles are also not qualified for claiming government subsidies. These factors make them financially unattractive vis-à-vis those domestically-produced.

However, by finding a Chinese partner, Mahindra & Mahindra can enjoy more benefits from establishing a manufacturing unit in the mainland.

In the meantime, Mahindra & Mahindra, through its South Korean unit, Ssangyong Motor Co., signed a deal with Shaanxi Auto, located outside of Xi'an in Shaanxi province, for exploring the possibilities of a joint venture and for setting up a production plant in China.

The joint venture may give rise to Ssangyong's first overseas production plant. The company said it is looking at China to make up for the fall in demand following Britain's exit from the EU.

TagsMahindra & Mahindra, India, Mahindra Reva Electric Vehicles, Ssangyong Motor Co.