The country's largest car air conditioning manufacturer Subros Ltd has entered into a joint venture with Japanese auto component maker Denso Corporation to design automobile air conditioning systems and other devices.
The joint venture company will be called Denso Subros Thermal Engineering Centre and is owned 74 per cent by the Japanese company and 24 per cent by Subros.
The new company will be located in Noida and is being set up with an initial investment of Rs 13.6 crore. It will be operational by September.
"The new JV company will further enhance design and development capabilities of Subros to provide complete technical solutions in thermal business as also enhance technical capability to support new product development for the satisfaction of our customers," said Ramesh Suri, chairman, Subros Ltd.
The new company will provide application design services and design automobile air conditioners for Subros and Denso group companies, including the latter's operations in Europe.
"This JV is the biggest for Denso for R&D purposes outside of Japan and they selected India to leverage its low cost advantage," Suri added.
Subros currently has a manufacturing capacity of 1 million car ACs spread across its five facilities in Noida, Manesar and Pune. It is looking at ramping up its capacity to 1.25 million and then to 1.5 million in the next 4-5 years.
The company supplies to all major car manufacturers including Maruti Suzuki, Tata Motors and Mahindra & Mahindra, and had a turnover of Rs 983 crore in 2009-10.
"We are also supplying air conditioning to the Nano and are considering setting up a plant near Sanand. That plant should be operational by the third quarter this year and though we have not decided on the capacity yet, it will be at least 1 lakh units per annum," Suri added.