New Delhi, Oct 24 (UNI) Abhishek Auto Industries Ltd (AAIL) today partnered with US-based Key Safety Systems (KSS) to infuse about 20 million dollars over the next few years for expanding upon the existing facilities.
KSS, a global automotive safety systems and components manufacturer, will acquire a 50 per cent stake in AAIL and post the JV, the entity will be renamed as KSS-Abhishek Safety Systems Pvt Ltd (KSSASSPL), said AAIL Director Dhiraj Dhar Gupta.
He added that the JV will invest 20 million dollars for expanding upon the existing facilities to add new steering wheel and airbag capabilities.
Under the agreement, the new entity will start manufacturing steering wheels and air bags by 2009, making the JV company, the first Indian company to manufacture all three safety components--safety seat belts, steering wheels and airbags--as one entity under one roof.'' The balance equity will continue with the existing shareholders of AAIL, he added.
AAIL is a leading seat belts manufacturer with about 40 per cent market share and revenues in excess of Rs 100 crore.
The entity will continue to manufacture ELR Seat Belts and also start the manufacture of Pre Tensioning (PT) seat belts, targeting to become the first company in the country to design, develop, test and manufacture PT seat belts locally.
The company believes that the government will soon make airbags mandatory in all vehicles in the short term, as was done with safety seat belts. ''This is where we see an immense potential. With the fierce competition amongst OEM's, we feel more and more models of cars are going to be rolled out with airbags as standard equipment in the next three years,'' said Mr Gupta.
Also with the growing auto segment in the country, the company expects more business to flow in.
The expected revenues from the new entity in the first full year of operation in 2008-09 would be around Rs 150 crore. The targeted revenue in the third year 2010-2011 is around Rs 250 crore and by the fifth full year, the company expects to touch the Rs 400 crore mark.