Enthralling News From Manufacturing Sector

Hinduja Group flagship Ashok Leyland has lined up investment worth Rs 5,250 crore to enhance its production capacity by 1,40,000 units over a period of next four to five years.
Larsen & Toubro plans new shipyard in India. Ashok Leyland is one auto manufacturer having huge possibility, but I don’t understand why are they more conservative than even Japanese investment and expanding the scale. Hindujas are a family running businesses world over. It can make Ashok Leyland a MNC with scale and technology comparable to other manufacturers abroad so easily through inorganic acquisitions. But it appears; it has its own way to go ahead.

JCB India Limited, manufacturers of construction and mining equipment, is planning to turn India into an export hub for markets in western and southeastern Asia. JCB is in the process of setting up a plant in Pune for heavy line manufacturing, investing Rs 150 crore. The heavy line would include loading shovels and track excavators and compaction equipment. The company would be investing another Rs 130 crore at its components plant in Pune, as well.

Maruti was ranked 91st on the Forbes list, Hero Honda Motors 108th, FMCG major HLL 116th, ITC 137th, IT major Infosys 155th and Mahindra & Mahindra 189th. Tata is the only Indian entity in the top 20 of the list of world’s 600 largest companies in terms of corporate reputation. The more important is the inclusion of mostly manufacturing companies in the list.

Larsen & Toubro Ltd. plans to set up a large shipyard at a cost of about 20 billion rupees to capitalise on expected demand for vessels as international trade grows. Here is a great step forward. Some more companies could take a plunge. Unfortunately, Indian engineering companies are not that dashing. BHEL has so much of orders for power plant equipment that it is failing to cope with. The growth of critical power sector is affected, and now the government is contemplating to have another plant. Why are another entrepreneurs coming in the sector?

General Motors Corp, the world’s largest automaker, is considering setting up an engine and powertrain plant in India. GM aims to expand rapidly in India. GM recently organized a groundbreaking ceremony at Talegaon, 130 km southeast of Mumbai, for its second car-making factory in India. GM would spend about $300-$400 million for an initial capacity of about 140,000 units, which would help meet its goal of raising market share to 10 per cent by 2010, from 2.3 per cent. I don’t know if GM is serious to compete in India’s auto market. I was associated when HM was a partner in GM’s Vadodara Project. It appeared GM just wishes to keep its presence in India waiting for a big boom for large volume.

Haworth, the second largest furniture manufacturer, which has 27 plants globally, is on course to establishing an ideation centre in Pune, which will be its third, and first in the country. The company, with $1.4 billion revenue, has set up a manufacturing base in India, plans to add more product lines in its Pune facility making it a hub for the region. It has shipped its first batch of products overseas to Dubai from its Pune facilty.

The $7.5-billion Chinese consumer electronics giant TCL Corporation is likely to set up two factories in India, one of which may be located in Uttaranchal. TCL is the first Chinese consumer electronics company to venture into manufacturing in India.

German carmaker Volkswagen has finally chosen Maharashtra for setting up a $300-million (Rs 1,350-crore) green field automobile manufacturing facility on a sprawling 500-acre site at Chakan, near Pune with employment opportunities for about 2,500 people. As per the plan, production of small passenger cars will commence by the second half of 2009.

Precision Automation and Robotics India (PARI), evolving from manufacturers of a sub-system and assembly automation process to a turnkey automation solutions provider, plans to set up 50 acre automation park in next 18 months. The company had geared up to meet the ‘explosive growth’ with Rs 250 crore capacity enhancement of automation projects per annum, up from the existing Rs 130 crore, as its global clients like GM and Volkswagen (indirect customer through a Tier I supplier) are setting up their bases in India. On the domestic front, major auto companies are also on the expanding spree. The company is pleading for a status of knowledge industry in stead of manufacturing that it is considered.

And the Chinese are coming again. Two Chinese motorcycle makers- Guangzhou Motors Company and Zongshen Motorcycle Company – have zeroed in on communist state West Bengal for setting up their assembly plants.

Guangzhou plans hit the market with its bikes in January 2007 in an alliance with infotech company Xenitis. A JV company Global Motors will produce the bikes by 2007 end. Global Motors has decided to brand its bikes Xoom in India. Global Motors is investing about Rs 280 crore for setting up a plant near Hoogly in West Bengal. The bikes will be positioned across all product segments – from basic commuter models to the executive segment. Initially, the firm will import the bikes in a semi-knocked down state from China and assemble them in India.

Zongshen has formed a joint venture – Mahabharath Motors – with Indonesia-based Salim group and NRI Prasun Mukherjee. Mahabharath Motors will roll out its bikes under the Arjun brand. Salim group has already bought around 70 acres of land near Kolkata for setting up the assembly unit. The firm intends to invest around Rs 1,100 crore to build a plant with a capacity to produce 150,000 motorcycles a year, which would later be hiked to 500,000 units a year. Its maiden product for India is expected to hit the Indian market by the end of 2007.

Mahindra & Mahindra (M&M) is also in talks with two Chinese firms – Lifan and Loncin – to set up parallel ventures, marking its foray into motorcycles.

I feel M&M is getting too ambitious. It must concentrate and stabilise its automotive business with emphasis on SUV, cars of Renault and Nissan, and parts and engineering outsourcing.

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