Mitsubishi-VST joint venture for diesel engines

Bangalore, July 27: Mitsubishi Heavy Industries Limited (MHI), Tokyo, Japan and VST Tillers Tractors Limited (VTTL) today forged a joint venture to manufacture small size diesel engines upto 50 HP at VST Tillers plant in Mysore.

Announcing the Joint Venture A T Nahender, Director, MHI-VST Diesel Engines, said the first phase of the project estimated to cost Rs 41.5 crore would have a plant capacity of 30,000 units and production would start by May, next year. It was planned to commence knock down production in December 2007 and gradually increase the indigenous content.

The joint venture, he said, was aimed at creating a gateway into India's rapidly growing small size diesel engine market and firmly establishing a foundation as a leading player in the area. The joint venture would be geared to meet the state-of-art technologies in diesel engines and emission norms, which were made mandatory for various applications.

Under license from Mitsubishi Heavy Industries Limited, Japan, MHI-VST Diesel Engines Private Limited would manufacture, sell and service diesel engines with displacements in the range of 640 CC to 1,760 CC. The advanced technology engines manufactured at Mysore would be sold in India and neighbouring countries under the "Mitsubishi" brand name.

The Indian market for diesel engine is rapidly growing through various applications into genset, marine, mobile phone towers, tractor and agricultural machinery. The current annual domestic demand (below 50HP) is over five lakh units. The venture had a distinct advantage in view of the buy-back potential from MHI and VTTL.

UNI