Processing .....please wait.. 
The article has been forwarded.... 
M&M forms JV with ITEC of U.S.
By agencies
|
Tuesday, 14 June 2005, 19:30 IST
MUMBAI: Automotive major Mahindra & Mahindra has signed an agreement with U.S. based International Truck and Engine Corporation to set up a joint venture to manufacture medium and heavy commercial vehicles, apart from making India a supply base for sourcing components and materials.
The Rs 4 billion new entity, named Mahindra International Pvt Ltd set up under a 51:49 joint venture between M&M and ITEC, will manufacture trucks and buses in India for domestic sale and export markets, Pawan Goenka, M&M chief operating officer said.
The JV, which will produce a new range of commercial trucks and buses starting in 2007 at one of M&M automotive's plants, will also provide engineering services for design and development of trucks and buses for ITEC globally, he added.
The vehicles will have 90 percent local content from the start due to availability of quality parts and materials from Indian suppliers, Goenka said, adding the light commercial vehicle business of M&M would be transferred to the JV.
The eight-member board will have a chairman, managing director and chief financial officer to be nominated by M&M while IREC will nominate the head of the departments for sourcing and engineering.
The investment would include ramping up production from the present 10,000 -15,000 to 50,000 LCVs per annum, vehicle assembly, paint and dye shop, Goenka said.
ITEC Truck group president Deepak Kapur and Mahindra Systems and Automotive Technologies president Hemant Luthra said the JV has already begun identifying products to be sourced, which could cost in exceed of $50 million in the first year.
Kapur said the JV has not focused on military vehicles but that could possibly be looked into and adapted to Indian conditions at a later stage.
M&M vice-chairman and managing director Anand Mahindra said the JV would enable the group to develop into a full line commercial vehicle player and compete with Tata Motors and also provide it with an opportunity to supply sourcing and engineering services to ITEC.
Kapur said under the JV, India would not only be used as a significant supply base for sourcing components and materials but would also provide engineering services for design and development of bus and truck products.
Goenka said a vehicle development centre would be established to facilitate the development of systems and products for ITEC.
He said the venture would leverage M&M's extensive distribution network to launch a full range of medium (16 ton) to heavy (44 ton) commercial vehicles based on ITEC's existing product line and adapted for the Indian market. It will also export vehicles through its own distribution channel as well as ITEC's and M&M's overseas networks, he added.