Continental joins hands with Rico

Continental Automotive Systems, a division of the 15 billion euros (nearly Rs 85,000 crore) Continental Corporation of Germany, has chalked out an aggressive investment plan for India. It set up shop here in 2006 and recently began engineering activities in Bangalore.

Continental has now tied up with Rs 1300 crore Arvind Kapur-controlled Rico Auto to set up a joint venture for manufacture of hydraulic brake systems. The Rico plant will provide facility for the joint venture in Gurgaon.

MASS PRODUCTION

“We will start out with hydraulic brakes and depending on market demand will look at other products. We will invest around 165 crore and increase this figure,” said Rico’s Arvind Kapur. The Gurgaon unit will begin mass production of hydraulic brake systems in the last quarter of 2008. It will produce hydraulic brake products and services consisting of calipers for front and rear axles, drum brakes, master cylinders, brake boosters and load sensing proportioning valves for vehicles of all classes.

The planned annual production capacity is one million brake actuation units and two million brake calipers, 1.5 million drum brakes and 0.5 million load sensing proportioning valves. On completion of the second phase, the plant is tipped to have an annual turnover of Rs 357.5 crore. "India plays an important role in our growth strategy for Asia," said president, Asia, Continental Automotive Systems, Jay Kunkel.

The seven global business units of Continental Automotive Systems include electronic brake and safety systems, hydraulic brake systems, powertrain and chassis, telematics, body and security, electric drives and aftermarket. Member of the executive board, Continental Automotive Systems, Karl Thomas Neumann said that his company’s products would come to India sooner or later depending on the requirement. “If volumes increase we shall invest depending on the opportunity,” he said.

SOURCING STRATEGY

Neumann hinted at manufacturing ABS for vehicles in India as well as importing electronic products. Continental, he added, would source at least 50 percent of its global needs from low cost nations by 2010. “A large part of our sourcing is electronic products which we source from the Asian area. The growth is in the more traditional parts like castings, stampings etc,” he said.

Neumann said that Continental would step up investments at its technical centre at Bangalore and increase manpower from 80 to 200 by the end of next year. The technical centre in Bangalore provides advanced technology and development projects for all business units of Continental Automotive Systems. It will support the needs of leading global automakers in the Indian market.

P THARYAN