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Hinduja Group’s Indian flagship and Commercial Vehicle manufacturer Ashok Leyland and automotive supplier Siemens VDO Automotive AG, Germany, have signed an agreement for a joint venture to design, develop and adapt infotronics products and services for the transportation sector. The agreement was signed on July 16th 2007 in Chennai, India, by Mr. R. Seshasayee, Managing Director, Ashok Leyland and Mr Christoph Maximilian Eisenhardt, CEO, Global Commercial Vehicles Business, Siemens VDO, Germany. The equity of the JV Company will be held at a ratio of 50:50 between Ashok Leyland and Siemens VDO. The joint venture is subject to certain corporate and statutory approvals from both sides.
This joint venture recognises the increasing content of IT, electronics and communications in vehicles the world over – a trend being witnessed in the Indian passenger car segment also. Infotronics content is expected to grow significantly in the Indian Commercial Vehicle segment also, following the introduction of BSIII compliant vehicles with electronically controlled fuel injection. The joint venture will develop electronic components and software such as instrument cluster applications, cockpit electronics and various control units for both commercial vehicles and passenger cars. While this Joint Venture Company is expected to cater to the requirements of Ashok Leyland vehicles, it will actively pursue opportunities with other vehicle manufacturers in India and abroad.
Both Ashok Leyland and Siemens VDO have been working together as consortium members in the Chennai Metropolitan Bus Terminus project to provide state-of-the-art Telematics solutions for the Tamil Nadu State Transport Undertaking. This project is expected to be launched later this year on a pilot basis at the Koyembedu Bus Terminus and the technology product and services developed have the potential to become the standard platform for all State Transport Undertakings in the country. This Joint Venture Company will accelerate the development of next generation Telematics solutions for introduction into the market.
“We believe that through innovation it is possible to design and develop new products to address emerging opportunities in developed and developing markets each of which having its particular need” said Mr. Seshasayee. “Our customer insight, engineering capabilities and competitiveness together with the technology strengths of a global leader such as Siemens VDO will be a unique combination that will fuel the growth of this JV in what is undeniably the emerging BIG opportunity in the Transportation sector.”
“We are happy that we have a strong partner from the Indian automotive industry in Ashok Leyland. It is our common aim to focus our joint venture's development activities on the special requirements of the market. For Siemens VDO, the joint venture is a further step in expanding our presence in growing markets,” explained Mr. Eisenhardt, at the signing ceremony.
The automotive industry in the second hemisphere countries has been registering double digit growth. Alongside, regulations for vehicle and traffic safety and for the reduction of emissions are being tightened. Innovative electronics aligned to the special requirements of these emerging markets contribute toward making passenger cars and commercial vehicles more economical, safer and cleaner.
Siemens VDO Automotive AG (Regensburg) is one of the world’s leading automotive electronics and mechatronics suppliers, earning approximately 70 percent of its total annual sales in this segment. As an automotive industry development partner, the company's innovative products and solutions enhance safety, driving comfort, cost-effectiveness and performance, as well as reduce emissions and keep drivers informed and in touch with the world. In the 2006 business year (Sept. 30, 2006), Siemens VDO generated sales of more than EUR 10 billion and achieved results of EUR 669 million based on US-GAAP, which corresponds to an EBIT margin of 6.7 percent.
In India, Siemens VDO Automotive is a division of Siemens Ltd., the flagship of the Siemens Group in India. The Siemens Group in India is a leading provider of industry and infrastructure solutions in India with a business volume aggregating about Rs. 9000 crore. It operates in the core business segments of Energy, Industry and Buildings, Information Technology, Communication, Transportation, Healthcare and Lighting. It has nation-wide Sales and Service network, 17 manufacturing plants, some 500 strong network of channel partners and through its 15 companies, the Siemens Group employs around 16,000 people.
The Hinduja Group is an investment and banking group with a diversified global portfolio of holdings across the manufacturing services and banking sectors. The Group, founded by Shri P.D. Hinduja in 1914, has activities across three core areas: Investment Banking, International Trading and Global Investments. As part of its Global investments, the Group owns businesses in Automotive, Information Technology, Media, Entertainment & Communications, Banking & Finance, Infrastructure Project Development,
Chemicals & Agri business, Energy, Real Estate and Healthcare.
The Hinduja Group also supports charitable and philanthropic activities across the world through the Hinduja Foundation.
Ashok Leyland is the flagship of the Hinduja Group and a leading manufacturer of commercial vehicles in India with 06-07 sales turnover of more than US $ 2 billion. With six manufacturing locations at Chennai, Hosur (three plants), Alwar and Bhandara, the Company has an annual production capacity of 84,000 vehicles. The Company has joint ventures in Sri Lanka and Bangladesh, associate companies in the Czech Republic and the UAE and also exports to over 20 countries worldwide.
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