2012 Commercial Vehicles Special: Minda Nabtesco to make CV air brakes

On December 6, the UNO-Minda Group announced a joint venture agreement with Nabtesco Automotive Corporation of Japan for the design, manufacture and sale of air brake components for commercial vehicles, and also clutch actuation products for passenger vehicles. Air brakes for the CV segment will provide additional braking power for heavy-duty trucks that transport huge loads. Cars usually use hydraulic brakes since they are smaller.

The joint venture will be set up with equity of Rs 373 million in a 51:49 partnership with UNO Minda holding 51 percent and Nabtesco holding 49 percent. Minda Nabtesco, the new company, will have its manufacturing facility at Pantnagar in Uttarakhand. Production is expected to go on stream in July 2014.

Nabtesco Automotive Corporation, which is a leader in automotive air brake systems and clutch control systems, will bring to the table its technology and manufacturing expertise while the UNO Minda Group, a leading Tier 1 supplier, will contribute its local knowledge of the market, supplier and customer base as well as facilitate HR and IR issues. Management control will remain with the Minda Group.

The new facility will cater to the requirements of Tata Motors, Ashok Leyland, Volvo Trucks and VE Commercial Vehicles. Tata Motors and Ashok Leyland both have production units in Uttarakhand which offers tax sops to manufacturers. Further, Tata Motors plans to shift its heavy truck production to Pantnagar from Pune and Jamshedpur next year. The Pantnagar unit currently produces sub-one tonne LCVs. This will also enable Minda Nabtesco to support Tata’s heavy-duty trucks.

The JV is being touted as a major move by both the partners as it will help them establish a new product line and explore new markets. As volumes rise, the JV will explore export options as well. Shinji Juman, president, Nabtesco Automotive Corporation, said that the tie-up with the NK Minda Group will help explore the Indian market for its products. “UNO Minda has an in-depth knowledge and experience of market dynamics. We are confident that this association will benefit both of us in the long term.”

Commenting on the association, N K Minda, chairman and managing director of UNO Minda, said: “Nabtesco is renowned for its technical excellence, exhaustive product expertise and extensive experience in Japan. With this partnership, we are strategically venturing into a new product line, in keeping with our diversification and consolidation approach to the Indian market.”