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ZF and Hero Motors Ltd form joint venture - ZF Hero Chassis Systems Print E-mail
Written by Ganesh   
Wednesday, 03 March 2010
New Delhi: ZF and Hero Motors Ltd. today signed a contract establishing the joint-venture enterprise ZF Hero Chassis Systems.  ZF is acquiring fifty percent of Hero Chassis Systems including two assembly plants in Halol, around 300 miles north of Mumbai, and in Talegaon, near Pune having an annual installed capacity for assembling 1.6 lakh units of chassis and axle systems.

Over the next two years ZF Hero Chassis Systems will invest Rs 80 crore to set up two new plants in Gurgaon and Chennai. These 2 new plants are expected to have an annual installed capacity for assembling 2.9 lakh units of chassis and axle systems.

The joint venture company will initially focus on the small car segment and then diversify into bigger cars.

"The aim of the joint venture is to enable us to offer ZF chassis technology to the Indian car market at local costs. Our durable, rugged, resource-saving products are recognized by customers around the world. The tie-up with Hero Motors will allow us to design and produce them at marketable prices for models ranging from mini to compact for the Indian market. To accomplish this to an optimal degree, we will be establishing our own development operations in India to support the joint venture. In addition, collaborating with Hero will open up new opportunities for us to start manufacturing high added-value pressed sheet metal components for small-vehicle axle systems ourselves," said Peter Holdmann, Head of the Chassis Systems Strategic Business Unit of the Car Chassis Technology Division and in charge of ZF axle system business activities.

Initially, some 100 employees will be engaged in the assembly of car axles for General Motors.

The contract was signed by Peter Holdmann and Hero Group's company director Pankaj Munjal in New Delhi.

"“The excellent reputation and market expertise of the Hero Group and the owning family Munjal will smooth our access into the Indian automotive market. Our contribution to the joint venture will be ZF’s technological expertise and our broad know-how in chassis design," said ZF CEO Hans-Georg Härter.

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