A couple of European and Asian auto majors including Peugeot-Citroen of France are in talks with Argentum Motors to manufacture components and cars, it is reliably learnt.
The partnership will involve joint sourcing for domestic and global requirements and assembly operations. Argentum Motors was set up by Hyundai Motors India former president BVR Subbu, SpiceJet promoter Ajay Singh and broadband entrepreneur Ashish Deora.
Argentum Motors had acquired Surajpur-based Daewoo facility for Rs 765 crore late last year. The company is now equipped to produce 4 lakh engines, 4 lakh gear boxes and 35,000 aluminium die casting division per annum. It has a press shop to produce body parts, moulding machines to make plastic parts, a paint shop and a captive power plant.
Mr Subbu is the CEO while Mr Singh is the chairman of Argentum. When contacted, Mr Subbu refused to share details. "We are in talks with a number of companies," he said. German and Asian auto firms which do not have a manufacturing base in India plan to take advantage of low production costs.
The plant will manufacture engines and transmissions for international original equipment manufacturers and also act as a contract manufacturer or a third party assembly centre for cars and commercial vehicles. The plant is expected to begin production by April. "Our immediate concern right now is to get the component plant started," said Mr Subbu.
Daewoo Motors India closed down its facility in 2001, after it ran into creditor problems. The plant manufactured Cielo, Matiz and Nexia cars and produced engines, gear boxes and body parts. The Daewoo manufacturing facility in India is the third largest after Maruti Suzuki and Hyundai.
Argentum is also planning to invest around Rs 500 crore to upgrade the facility. The three promoters of the company will eventually hold around 12% in the company after the debt is converted into equity and fresh investors are roped in.
"This capacity will attract a large number of global auto manufacturers as the company has all the building blocks for integrated car and component manufacturing," said an analyst of a Mumbai-based brokerage.
5 comments:
it was a big auto major deal.ashish deora going very fast . this deal will give major impact on auto industry.
Now, contract manufacturing in auto sector
Till now, contract manufacturing has largely been associated with either the fast moving consumer goods industry or some other small daily use items. But for the first time, such a facility is being readied for automobiles in India....
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Argentum Motors expand capacity to produce 4 lakh small cars per annum
New Delhi, March 7 In a short span after Argentum Motors acquired the production facility of erstwhile Daewoo Motors, the company is set to expand its capacity for small cars to 4 lakh per annum. Argentum Motors would also start manufacturing 1-2 litre engines to cater to the demand for small cars.
“We are creating flexibility at our plant to suit a larger range of vehicles. Our existing facility, which can produce engines in the size of 1.3-1.7 litre, is being expanded for 1-2 litre,” said Mr Ajay Singh, Chairman, Argentum Motors.
He said that the company was also setting up a new paint shop and an assembly line which would have a capacity of 2.5 lakh-3 lakh cars per annum at an investment of Rs 500 crore....
This was a great and pretty good deal. I think, by this deal, Ashish will grow soon and thanks for the post. Also please update it soon.
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