The Hindu Business Line : Non-auto cos seek to drive on asphalt path

THE boom seen in the Indian automobile industry has attracted the attention of several unlikely players. For a host of domestic companies currently involved in businesses as varied as pan masala to tractors to industrial engines are drawing up plans to make a mark in the Indian automobile sector.

Take the case of the about Rs 700-crore DS Group, which has brands such as Rajnigandha pan masala, Tulsi gutka, and Catch spice and bottled water in its portfolio. The company is currently in talks with several global players to strike a joint venture to manufacture multi-utility vehicles (MUVs) in India.

"We have given the mandate to Ernst & Young to help us find a joint venture partner. We are looking to set up a unit in Assam. The investments which would go into this project would be about Rs 150 crore to Rs 200 crore on the minimum," Mr Ashok Aggarwal, President, DS Group, said.

Brushing aside apprehensions about the practicality of setting up an automobile manufacturing\assembling unit in the North-East, Mr Aggarwal said that there are several advantages in the move, including the excise and sales tax exemptions available there.

"Further, there is no automobile plant in the eastern region apart from the Hindustan Motors plant. We believe we can find a sizeable captive market for our product in the region. The MUV which we will be manufacturing would be built keeping in mind the terrain of the area and would also be priced very competitively," Mr Aggarwal said.

Similarly, the Rs 1,000-crore Sonalika Group, which in 1995 had diversified into the manufacturing of tractors from making agricultural implements, has tied up with British automobile giant Rover to launch sports utility vehicles in India in the next year. The company is in the process of setting up a plant with an annual capacity of 24,000 units in Himachal Pradesh.

Meanwhile, industry officials point out that a Mumbai-based company, which is currently involved in the manufacturing of industrial engines, is also planning to foray into the motorcycles segment soon. The company is believed to have tied up with a Chinese company to facilitate the same.

Several regional auto ancillaries firms, including Sachdeva Enterprises, are also believed to be in the process of foraying into the segment of three-wheelers, the exports of which have seen a multi-fold increase in recent years.

Incidentally, sales of passenger vehicles (which includes cars, utility vehicles and multi-purpose vehicles) grew 32.20 per cent in the last fiscal to cross the one-million (units) mark. This figure is expected to grow 10-15 per cent this year, driven primarily by attractive finance schemes and the availability of more models in the market.

More Stories on : Diversification | Tobacco | HCV/LCV/Tractors

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