The facility will act as a third party assembly centre for cars and LCVs. Later it will become a supplier of Engines and Gear boxes, as original equipments, to other domestic and international automobile manufacturers. According to the current plan, production would start in the factory by April 2008, after 4 months of work to make the plant operational.

Originally set up by Daewoo to produce Engines, Gear boxes and body parts, this unit used to assemble Matiz, Ceilo and Nexia Cars. It was closed down in 2001 due to financial problems its parent company Daewoo was facing. The Rs 3000 crore facility is the third largest automobile manufacturing factory, after Maruti Suzuki and Hyundai, in India. Compared to Maruti, Daewoo had a higher level of localisation.

The 210 acre facility in Surajpur is equipped to produce 4 lakh engines, of 1.3 to 1.7 litres capacity, per annum. The flexible manufacturing system would permit it to produce a variety of engines. Additionally, the plant has capacity to produce 4 lakh gear boxes, press shop to produce body parts, molding machines to make plastic parts, aluminum Die casting division, a paint shop and a 42 mw captive power plant. There is a modern R&D centre, Design centre and state of the art testing centre in this facility.

Apart from the high quality manufacturing infrastructure, Argentum will offer almost 20% reduction in cost.

Human recource:
There are tremendous skill sets available at the plant. The facility, lying idle since its shutdown in 2003, is to be refurbished and operationalised, with Crosslinks’ affiliate Pan India Motors co-opting workers of the Daewoo Employees’ Union, who have been mostly unemployed for almost five years.

Machinery upgrade:
Argentum is planning to invest about 500 Crores to further modernize the factory in next two years. Facilities will be upgraded to manufacture bigger capacity engines and assemble commercial vehicles. A new paint shop and a new press shop are planned to make this facility one of the most cost effective and comprehensive production centers for automobile manufacturers. 

Obstacles cleared:
There were several court cases challenging the acquisition. Singh said that the period of conditions set by the court has just ended. From today they can start using the plant without any strings attached, he added.

Prospects:
Argentum Motors is known to be talking to at least 3 international parties for contract manufacturing cars and LCVs. Daimler Trucks, which has entered into a joint venture (JV) with the Hero Group to manufacture light, medium and heavy-duty commercial vehicles, may use Argentum for contract manufacturing. Ajay Singh said that talks were on with German and US firms who do not have a base in India but plan to take advantage of low costs to produce locally for the Indian market.