Maruti Udyog enters into joint venture

Maruti Udyog Ltd has informed that Magneti Marelli, Suzuki Motor Corporation and Maruti Suzuki India Ltd have signed an agreement for the creation of a joint venture in India, aimed at the production of electronic control units (ECU) for diesel engines.

According to the agreement, Magneti Marelli will contribute 51% of the share capital of the new Company, Suzuki, 30% and Maruti, 19%.

The initial investment is expected to total approximately Euro 15 million (about Rs 750 million)

The project will be funded through a mix of equity and debt.

The industrial facilities of this joint venture Company will be located in Manesar, in the industrial district of Gurgaon, approximately 40 km southwest of New Delhi.

It will he part of the Suppliers' Park spread over 100 acres, being set up by Maruti Suzuki at its campus in Manesar.

The start of production is scheduled for the end of 2008 (calendar year). As part of the objectives, the production of this plant should reach a total of about 500,000 control units per year, when working at full stretch.

The electronic control units produced in Manesar will be initially used for Maruti Suzuki diesel cars and, later on, will also cater to other car manufacturers.