Bangalore, July 14
Car parts maker Continental said on Monday it opened a new electronic manufacturing facility and R&D centre in Bangalore at a total investment of Rs 220 crore.
The company said it would invest another €15 million (Rs 90 crore) in the Bangalore facility over the next couple of years, and expand manufacturing facility in Bangalore by 2011-12 if the growth continues. Continental is targeting 60 per cent compounded annual growth rate in its India business by 2012.
The new plant will manufacture instrument clusters for passenger cars, commercial vehicles and two-wheelers, immobilizers, engine management systems for diesel and gasoline engines, electronic control units for power assisted steering and body control units out of the Interior Division, the company said.
Continental said this manufacturing unit can accommodate 400 employees and the R&D centre can accommodate another 400 engineers. Production at the unit has begun from May 2008, and the office and the R&D centre are expected to start from September 2008.
The Indian automotive market is expected to grow at a CAGR of 15 per cent, and localisation of the entire value chain of R&D, sourcing and manufacturing is our key focus for success in this market, said Dr. Markus Distelhoff, Managing Director of Continental Automotive Components (India) Pvt Ltd.
The company said the new manufacturing facility would add some new products to their portfolio in India. Also, some of the products that were imported would now be produced in this facility.
If the manufacturing is done in India, it would save import tax, which is about 5 to 10 per cent of the product price and also logistic cost, said Mr Jay Kunkel, President, Continental Asia & Member of the Automative Management Board of Continental AG.
Continental in India is headquartered in Bangalore, and has six manufacturing facilities and three R&D centres. The manufacturing centres are located in Bangalore, Manesar, Pune, Gurgaon, Sonepat and Kolkata, while the R&D centres are located in Bangalore, Kolkata and Gurgaon.
The company, which supplies components to almost all car manufacturers in India, said it would supply the fuel pump and the fuel level sensor for the Tata Nano.
Mr Kunkel said the investment in the new unit reflects the company’s strategy to strengthen its manufacturing operations in Asia as the company intends to make 20 per cent to 25 per cent of its total sales in this region by 2015.