New Delhi: French firm Valeo Electrical Systems, an Euro 11 billion automotive supplier, and the Rs830 crore NK Minda Group, a major player in the Indian auto components industry, are jointly setting up a plant in Chakan, Pune to manufacture starter motors and alternators for the domestic and overseas passenger car market.
An agreement to this effect was signed here on 24 July. The venture, Valeo Minda Electrical Systems Pvt Ltd (VMESPL), will set up the plant at a cost of Rs100-120 crore, of which two-thirds will come from the the French company, while Minda’s stake would be one-third, a Minda Group release said.
The statement added that the investment would be spread over four years and around 10% ofthe total amount is earmarked for setting up an R&D laboratory. Commercial production is likely to commence in March 2008.
Addressing a press conference, Orazio Ragni, vice-president, Valeo Group, said that the ventire was targeting a turnover of Euro 50 million (Rs275 crore) in the fifth year of operations. He said his group had a 20% market share in starters and alternators worldwide and was looking at achieving a similar share in India in the long run.
Nirmal K. Minda, managing director, NK Minda Group, said the JV was largely targetting the passenger car segment and that he was in talks with a few auto majors in this connection. However, he did not reveal any names. But he did say VMESPL was looking at both, OEM (original equipment manufacturers) customers and the aftermarket and would gradually move to HCV, LCV and the two- and three-wheeler segments after consolidating its share in passenger cars.
The total OEM market for cars and MUV’s is currently pegged at 1.5 million each for starters and alternators, and is growing at 9% a year. Major players in this market, apart from the Minda group, are Mico Bosch, Lucas TVS and Denso.