Magneti Marelli to produce shock absorbers

New Delhi: Fiat Group’s €5-billion company Magneti Marelli has entered into a joint venture with the auto component company Endurance Technologies to produce shock absorbers for four-wheelers in India and Thailand.

The joint venture would give Endurance a majority stake with one extra share. According to the terms of the agreement, the proposed company will be owned by Endurance Technologies in the ratio of 50 per cent plus one share and 50 per cent minus one share of Magneti Marelli.

The venture company, set to be operational by the first quarter of 2009, will produce components in Endurance’s existing manufacturing facilities in Chakhan, near Pune, and another close to Bangkok, Thailand, without any additional investment.

“We have facilities at both the locations. So there would be no fresh investment incurred,” Mr Biswajit Choudhury, Group General Manager told Business Line.

With this venture, Endurance also expects to bag higher orders from Tata Motors, which has a partnership with Fiat. Considering Magneti is a Fiat Group company, Endurance plans to leverage this relationship. It is also eying business to supply to Tata Motor’s new range of commercial vehicles in the Thai market.

“We are already in talks with Tata Motors to supply components for commercial vehicles.

“But with the collaboration with Magneti Marelli, our position gets strengthened,” Mr Choudhury explained.

Magneti Marelli, which has staff strength of 28,000 globally, with its 46 production facilities and nine R&D centres, is aiming to strengthen its presence in the BRIC countries through such a tie-up.

“The agreement with Endurance, leader in India and with an international footprint confirms our strategy to be directly present in one of the most strategic markets in the world,” commented Mr Eugenio Razelli, Magneti Marelli’s Chief Executive Officer.