ZF-Lemforder forms JV with Hero Motors, takes 50 per cent stake in Hero Chassis Systems
03 Mar 2010
Hero Motors Limited has sold 50 per cent stake in its subsidiary Hero Chassis Systems to German auto component firm ZF-Lemforder for an undisclosed sum as part of a deal with ZF group to form a joint venture company, ZF Hero Chassis Systems Pvt. Ltd, to design and manufacture chassis and axle systems to sell in the Indian market.
The Munjal family, the co-promoters of Hero Motors Limited, part of the $4.5 billion Hero Group have sold a 50-per cent stake in their privately owned Hero Chassis Systems, for an undisclosed sum.
New Delhi-based Hero Motors signed a JV with the German compaqny, based in Friedrichshafen, based ZF-Lemforder, part of €12.5 billion ZF Group to form a joint venture company ZF Hero Chassis Systems to design and manufacture chassis and axle systems for the booming market for small cars in India.
Included in the joint venture company are Hero Motors' two production facilities at Halol in Gujarat and Talegaon in Maharashtra, which Hero Motors had acquired from US-based component maker Delphi in 2008. It has invested a further Rs4.6 crore at the two plants.
ZF Hero Chassis Systems would invest Rs80 crore over the next two years to set up two new plants at Gurgaon and Chennai with a capacity to assemble 2.9 lakh units of chassis and axle systems in order to cater to the northern and southern markets.
The production facilities at Halol and Talegaon, which have an annual installed capacity for assembling 1.6-lakh units of chassis and axle systems, are already supplying front corner module and rear axle assemblies to General Motors India for all its car models.
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