Continental Automotive Systems, a division of the renowned auto supplier, Continental AG, has announced its liaison office and a technical center in India. While the liaison office is located at Gurgaon, Continental is expanding business with Indian and International OEMs in India through this office. The Technical Center is located at Bangalore and would provide the Indian auto market with advanced technology products and development projects for all the business units of Continental Automotive Systems. 

Supporting engineering projects all over the world, the technical center s will contribute to the growth of Continental Automotive System’s global engineering capacity and balance its worldwide engineering costs. The new center will also support the needs of leading global automakers in the Indian marketplace and as an initial part of the concept, two independent engineering facilities are being established with local partners in Bangalore. Current projects in the technical center focus on software development in domains of telematics, body and security, powertrain and chassis and electric drives. 

"India means a lot to Continental. It’s a market with huge potential and is growing very rapidly. We also have to support our global customer base in their growth plans for India”, said Dr. Karl-Thomas Neumann, President Continental Automotive Systems and Member of the Executive Board of Continental AG. Continental Automotive Systems has about 60 engineers in Bangalore currently and plans to hike this number to more than 200 engineers by 2008. The company will be hiring extensively in the next few months.

The board of directors of Bajaj Auto Limited (BAL) has approved the scheme for demerger of the businesses of the company. While the scheme is subject to approval, the demerger is expected to create separate entities with management focus on clearly laid out objectives such that the auto company will focus on auto business, the wind power and financial business company will focus on wind energy generation, insurance, consumer finance and new initiatives in and financial services space and the primary investment company will focus on new business opportunities. While the demerger will facilitate more transparent benchmarking of the companies with its peers in their respective industries, the two companies will be able to tap into the cash pool of the investment company to support future growth initiatives if required. Bajaj Auto has formed two companies—Bajaj Holding and Investment Limited (BHIL) and Bajaj Finserv Limited (BFL). 

The auto business of the company along with all assets and liabilities pertaining to, including investments in PT Bajaj Auto Indonesia and a few vendor companies would be transferred to BHIL in addition to a total of Rs 15000 million in cash and cash equivalents. The wind power project, investments in the insurance companies and the consumer finance company along with the relevant assets and liabilities will be transferred to BFL in addition to a total of Rs 8000 million in cash and cash equivalents. The remaining assets and liabilities including investments in group companies and balance cash and cash equivalents would be retained in the existing Bajaj Auto Limited. 

Part of the scheme includes renaming BHIL as Bajaj Auto Limited and the existing Bajaj Auto Limited as BHIL. All shareholders in the existing Bajaj Auto Limited would for every share held in the existing Bajaj Auto Limited, continue to hold a share of BHIL (existing BAL) of face value of Rs 10 each fully paid up, be allotted one share of the new BAL of face value of Rs 10 each fully paid up and be allotted ones share of BFL of face value of Rd 5 each fully paid up. 

Motorcycle sales of Bajaj Auto rose 24 per cent to 2.3 million as compared to 1.9 million posted in 2005-06. The period saw the introduction of the Pulsar 200 in the premium motorcycle category, the commissioning of the Pantnagar facility for the manufacture of Platina and the introduction of 135cc Dicsover.

Pune-based Siddheshwar Industries and Michigan-based MasterAutomatic have signed a MoU to form a 50: 50 joint venture to produce forged auto components and precision machined components for the auto industry. The joint venture will begin operations in Pune in one of the existing facilities of Siddheshwar Industries, according to Raveeraj Takawane, director, Siddheshwar Industries, in the next three months. 

Speaking to Automotive Products Finder at Pune, James E Ward, director of marketing and sales, MasterAutomatic, said, “We feel India has greater and better opportunities”. Explaining that Siddheshwar and MasterAutomatic could be brother and sister companies, Ward added, “Our capabilities are different, our goals are the same. We want to expand the auto components base here.” 

MasterAutomatic, set up in 1942, is a privately owned company that produces precision machined parts and assemblies. With a product line comprising power steering components, transmission system components, climate control and fluid handling components, brakes, powertrain components, airbag components, etc, the company’s client base includes BorgWarner, Eaton, Visteon, Delphi, DaimlerChrysler, GM, Robert Bosch, Magna, TRW, Dana, Siemens and many others. 

Asked if his company would be keen to expand the existing relationships to the new JV, Ward said, “We are looking at bringing our relationship with Ford, DaimlerChrsyler, etc, here. Delphi is a big customer of ours. Eaton is our customer. We supply transmission and steering gear components to Eaton, GM and Delphi. We do machine assembly and complex assemblies.” 

Siddheshwar Industries, at the other end, produces transmission components, locomotive brake system components, crankshafts, axles, camshafts, starter clutch assembly, etc, and has a clientele that comprises Bajaj Auto, Kirloskar Oil Engines, Greaves Cotton, Lombardini India, Faiveley Transport, etc. While the joint venture between the two auto suppliers is expected to stimulate growth and increase business for both the entities in the global market, the alliance is looked upon as a source for one-stop shop for precision machining and forging needs of the industry. 

Pointing towards an investment of US $ 5 million in the JV at the end of this year and an expected growth of 40 to 50 per cent, Ward stated, “We will bring technology and support for exports to US. We are located next to American Axles and see a lot of exports coming out of this JV and major growth coming out in India. We want to expand our capability. We have received the first order for shafts for home appliances from Electrolux of Italy. We started discussions with Lockheed and the JV could be manufacturing aerospace components.” 

Speaking about the JV, Ward further said, “we are currently Tier 2 supplier in US. Our customers in the US are looking at cost reduction and we believe that exports from India is going to help cater to cost issues. It will help us to grow our current business also”. “When Delphi and Visteon fell on bad times we said we would support you. We are committed to our customers completely through good and bad times. We are looking at Siddheshwar in the same light. We are looking at growing out of India and not just in India. We see the JV as a joining of the families”. 

Stressing the fact that his company is committed to India and that it is possible that the JV would grow into China, Ward said, “Sub assemblies is what we are looking at here. We do it in US currently. Tata is a place we have great hopes for. We want to be a part of their future. We are working with Tata on their new UV and our focus will be commercial vehicles. We would be also looking at two and three wheelers”. MastAutomatic, as part of the joint venture is interested in bring the power steering system technology to India. 

Interestingly, the JV looks at MasterAutomatic and Siddheshwar providing world-class precision machined products for a global automotive base that offers total machining solutions and maximum value, and develop the infrastructure to meet future market needs in addition to delivering economies of scale and efficiencies.

DaimlerChrysler is claimed to have confirmed recently that it will sell a controlling interest in its struggling Chrysler Group to Cerberus Capital Management of New York, a private equity firm that specializes in restructuring troubled companies. The price being paid is said to be in the region of US $7.4 billion, mostly in the form of capital that Cerberus will put into Chrysler. 

While the deal unwinds a 1998 merger that was meant to create a trans-Atlantic automotive powerhouse, the agreement to sell Chrysler should leave DaimlerChrysler with a 19.9 percent stake in Chrysler. While sources say that DaimlerChrysler will change its name to Daimler AG, they add that the move will free a great amount of pension and health care liabilities in the new Chrysler company.

DaimlerChrysler has begun the construction of its new plant for Mercedes-Benz vehicles at Chakan near Pune. The foundation stone of the new facility was laid by the Chief Minister of Maharashtra, Vilasrao Deshmukh in presence of Minister of Industries, Ashok Chavan and Minister of State for Industries, Rana Jagjitsinh Patil. Dr. Joachim Schmidt, Chairman of the Board, DaimlerChrysler India, Prof. Eberhard Haller, Member of the Board, DaimlerChrysler India, and Dr. Wilfried Aulbur, Managing Director and CEO of DaimlerChrysler India represented DaimlerChrysler India. 

The event follows the MoU signed by DaimlerChrysler India with the Government of Maharashtra on January 4, 2007. The new manufacturing facility will produce the Mercedes-Benz S-Class, E-Class and C-Class cars for Indian market and start of production is expected around beginning 2009. The new Chakan plant will initially employ around 350 workers and an investement of Rs 275 crores. Speaking at Chakan, Dr Aulbur said, “This is a red letter day for the men and women of DaimlerChrysler India. As a company, we have enjoyed steady and profitable growth in India and we are looking forward to continue our success story here in our own premises”. 

Apart from the three luxury Mercedes models, the Chakan plant could be a manufacturing location for the Actros in India as well. “We could look at manufacturing Mercedes trucks here at Chakan. However, no final decision has been taken yet”, said Dr. Joachim Schmidt. Addressing a query regarding auto components cluster, Dr Aulbur stated that the revenues generated from component exports is greater than the revenues generated by selling cars in India”. “We are asking for a uniform excise structure across passenger vehicle segments in India so that we can address more volumes and drive more localization. The C-Class is currently 50 per cent localised”. DaimlerChrysler India sold 2,121vehicles in 2006, achieving strong growth of 11 per cent (2005: 1915). In the first quarter of 2007 DaimlerChrysler India already recorded further growth of 17 per cent.

Pune based Autoline Industries Ltd (Autoline) announced its strategic acquisition of Detroit Engineered Products, USA (DEP). Under the terms of this deal, Autoline will acquire a 51% stake in DEP’s Global Operations for a consideration of approximately US $ 7.65 million in a combination of cash and equity. This includes Nuvent Technologies, a wholly owned subsidiary of DEP located in Chennai, India. 

Duke Equity Ltd, a Dubai International Financial Centre (DIFC) based private equity group, which holds a stake in Autoline Industries Ltd, acted as an Advisor and Arranger for the transaction. This acquisition was made to accentuate Autoline’s growth and expansion plans for their engineering, design and testing division. 

Making the announcement, Mr Gopal Patwardhan, Chairman, Autoline Industries, said, “This acquisition would enable AIL to successfully ride the Global Auto Design Outsourcing trend by offering cutting edge solutions for automotive components to Indian & global manufacturers. With this strategic initiative along with the others we believe that AIL will have a footprint in all the major Automobile OEMs of the world.” 

Mr Radha Krishnan M (CEO, Detroit Engineered Products) said, “We at DEP have always believed in innovation and have been providing quality software products for the automotive and non automotive engineering segments across the globe. This synergy with Autoline Industries will not only help DEP to gain access to a wider market but also provide a comprehensive range of innovative products adding value to the engineering capabilities of their customers.” He further added, “that this strategic move will help us to catapult AIL towards being one of the leading engineering design and solutions provider globally.”