Online edition of India's National Newspaper
Friday, Nov 18, 2005
Google



Business
News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Opinion | Business | Sport | Miscellaneous | Engagements |
Advts:
Classifieds | Employment | Obituary |

Business Printer Friendly Page   Send this Article to a Friend

M&M forms venture with International Truck of U.S.

Staff Correspondent

Project investment is $80 m; Mahindra International will make trucks and buses


  • Aims to capture 15 p.c. market share in commercial vehicles
  • The joint venture to use M&M's distribution network

    — Photo: Paul Noronha

    WIDENING RANGE: The Chairman of Mahindra & Mahindra, Keshub Mahindra (right), with the Chairman, President and CEO of Navistar International Corporation, Daniel C. Ustian, at the signing of a joint venture agreement with International Truck & Engine Corporation in Mumbai on Thursday.

    MUMBAI: Mahindra & Mahindra on Thursday signed a 51:49 joint venture with International Truck and Engine Corporation, (ITEC), U.S., to make trucks and buses in India. The joint venture has been christened Mahindra International. ITEC is the North American leader in medium and heavy trucks and the world's largest manufacturer of medium duty diesel engines.

    M&M and ITEC will have five directors each on the Mahindra International board. Anand Mahindra will be the Chairman of the board and the management team will be led by Arun Pande as Managing Director.

    The project investment would be $80 million (about Rs. 360 crore) and M&M has recently transferred its light commercial vehicle business to Mahindra International. Typically, the investment would be in a debt equity ratio of 0.5:1 but the structuring for the investment is still being negotiated.

    "The money would be invested in a new truck assembly facility and possibly in an engine testing facilityThe company aims to garner 15 per cent market share in the commercial vehicle range of six tonnes to 40 tonnes over the next five to six years,'' said Mr. Pande.

    The transfer will enable the company to start production from its inception pending the launch of the new range of medium and heavy commercial vehicles in 2007.

    According to Pawan Goenka, President of M&M's automotive sector, the plant will have capacity to build 20,000 light commercial vehicles (LCVs) and 50,000 medium and heavy commercial vehicles annually.

    "This joint venture will help us strengthen our competencies across our core areas of product development, engineering and manufacturing. While enabling the widening of our participation in the auto sector in India, our relationship with International Truck will support our aspirations to be a global player,'' said Anand Mahindra, Vice-Chairman and Managing Director, M&M. The joint venture will use the M&M's distribution network in India and has already appointed 140 dealers.

    Mahindra International has commenced manufacturing LCVs under a contract manufacturing arrangement with M&M at the Zaheerabad plant.

    Sourcing services

    The joint venture company will provide sourcing services and engineering services to ITEC's North American operations. International Truck aims to leverage India's competitive automotive parts supply base using M&M's strategic sourcing business unit, Mahindra Systems and Automotive Technologies (MSAT), and the joint venture company's sourcing team.

    Printer friendly page  
    Send this article to Friends by E-Mail



    Business

    News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Opinion | Business | Sport | Miscellaneous | Engagements |
    Advts:
    Classifieds | Employment | Obituary | Updates: Breaking News |


  • News Update


    The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
    Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

    Copyright 2005, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu