Diesel fuel injection systems supplier Delphi-TVS on Saturday said it would invest Rs 500 crore (Rs 5 billion) to manufacture common rail fuel injection systems and set up a technical centre in Chennai for product development.
"The investment would be made over a span of four to five years with a majority of it going in the first three years to manufacture injection pump for the common rail system. We are setting up a new unit for the purpose, which would be partly in the current facility and partly a greenfield," Delphi-TVS managing director T K Balaji told reporters at the eight Auto Expo in New Delhi on Saturday.
The company, which currently produces 1,000 diesel pumps per day, has set a target of producing over a million pumps annually by 2010 for rotary, common rail and other fuel injection systems, he said.
Asked how the company would fund the investments, he said it would be partly through internal accruals, debt and if need be, additional capital from the joint venture partners.
Balaji said the company was looking to add one customer every year and expand its product portfolio to medium duty common rail solutions for commercial vehicles to touch a
turnover of Rs 1,200 crore (Rs 12 billion) by 2010. Currently, the company has a turnover of Rs 330 crore (Rs 3.30 billion).
He said Delphi-TVS would utilise their facility in India not only for supplies in domestic market but also cater to the markets of the Asia Pacific region.
Asked by when the company would start manufacturing pumps for the common rail system he said: "We expect by 2007 we should be able to produce them."
On the probability of manufacturing the entire common rail system in India, Balaji said it would depend on the volumes it achieved here.
"Currently, we are importing the electronic control unit for the common rail system from Singapore. Only when the volumes rise substantially we might look at manufacturing the entire system here. Till then we will continue to import," he said.
On the technical centre, he said Delphi-TVS planned to invest Rs 50 crore (Rs 500 million), which would be a part of the Rs 500 crore investment, at its existing facility in Chennai.
The centre would be opened by the middle of this year and complement the current engineering facilities and focus on developing new products and applications to meet future emissions legislation, he said.
"The technical centre will be one of Delphi's 10 diesel application centres worldwide and would be equipped with facilities such as chassis dynamometer, cold room, common rail engine test bed and common rail rest rigs," he added.
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