Financial Daily from THE HINDU group of publications
Friday, Nov 14, 2003
Financial Daily from THE HINDU group of publications Friday, Nov 14, 2003 |
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Automobile Components Corporate - Alliances & Joint Ventures Auto component joint venture — JBM Group signs pact with Thai co Shyam G. Menon
Mumbai , Nov. 13 JUST over a month since India and Thailand concluded a free trade agreement, leading Indian automobile component manufacturer JBM Group has signed up with Thai Summit Autoparts Industry Co Ltd to set up a 50:50 equity-sharing joint venture in India. The new company is expected to be operational in about a year's time. The capital investment required and the products for manufacture are yet to be firmed up, said Mr S.K. Arya, Managing Director of Jay Bharat Maruti Ltd. Initially, the joint venture will seek to satisfy component needs in the two-wheeler segment. With plants at New Delhi, Gurgaon, Faridabad and Chennai, the JBM Group, to which Jay Bharat Maruti belongs, makes a range of automobile components.Thai Summit Autoparts is part of the larger Thai Summit Group. Its official Web site says the company produces auto parts ranging from oil filter and air cleaner to rear axle housing, propeller shaft and dash panel. Reports elsewhere on the Internet cite electrical cords, interior trim, shock absorbers and motorcycle springs also among items of manufacture. These latter reports mention, the Thai Summit Group, which has several joint ventures, kept close ties with Mitsubishi. Wednesday's agreement in Bangkok, between the JBM Group and Thai Summit, is significant given the recent free trade agreement between India and ThailandThailand has been a popular manufacturing and sourcing destination for foreign OEMs (original equipment manufacturers) such as Ford, Honda and Toyota. According to Mr K.V. Shetty, President, Automotive Component Manufacturers Association of India, the domestic auto component industry is not opposed to the spirit of FTA, but wants to ensure a level-playing field with foreign competition. Consequently, the trend of rising domestic raw material cost - prominent therein being steel prices - must be contained and value addition on the item imported under FTA, insisted upon. Also to be looked into, is the issue of strict adherence to clauses like `country of origin.'
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