Ashok Leyland Ltd, India's second-biggest bus and truck maker, said on Tuesday it had formed a joint venture with Finland's Alteams to make components for the telecommunication and automotive sectors.
The equal joint venture, subject to regulatory approvals, will commence in 2007, with an initial investment of more than 1.75 billion rupees, the Indian company said.
The joint venture to make high-pressure die casting aluminium products will achieve revenues of 6.5 billion rupees in five to six years, when total investment will add up to 3.35 billion rupees, it said in a statement.
"The JV reflects the expansion of Ashok Leyland's presence in the auto components sector to take advantage of rapidly growing opportunities both in India and abroad," Managing Director R Seshasayee said.
The joint venture will also partly meet Leyland's requirements for components for engines and gearboxes, and its portfolio will extend to components for passenger cars as well as other non-automotive applications, it said.
The joint venture would employ more than 1,000 people, directly and indirectly, Ashok Leyland said. A manufacturing facility is planned in Tamil Nadu state, where Ashok Leyland is based.
Shares in Ashok Leyland, which trails Tata Motors Ltd in the world's fifth-biggest market for buses and trucks, were up 0.9 per cent at 38.10 rupees in a firm market.