Hyderabad: London based Caparo Group is in talks with the Andhra Pradesh government to set up a joint venture (JV) commercial vehicle manufacturing facility with Hyundai Motor, said a state industry department official.

A Caparo team led by Chief Executive Officer Sunil Pehlani visited Hyderabad last week to discuss setting up the proposed luxury bus unit via the Hyundai-Caparo JV.

"The Caparo team sought infrastructural support from the state government. The team also met Chief Minister Y S Rajashekara Reddy," the official said.

The Caparo Group had signed a memorandum of understanding with the Andhra Pradesh government in January for setting up an auto special economic zone for which the government is to allot 2,000 acre land to the group.

"Almost 500 acres have already been allotted to the company and another 1,000 acres is to be allotted, which they plan to use for the commercial vehicle plant," the state industry department official said.

South Korean auto major Hyundai, has signed a five-year technical agreement with Caparo Group to manufacture luxury buses in India.

The joint venture will build a 1,500 units-a-year factory to manufacture and sell the vehicles.The plant plans to begin production by early 2009, initially producing 350 units.