Delphi, the world's largest auto component company, plans to use its Indian joint venture as a sourcing point for the technologically advanced common rail fuel injection systems for diesel engines.
The CFRI is to be made by Delphi-TVS, where Delphi owns 52 per cent of the equity. Delphi-TVS's plant in Mannur, near Chennai, would join Delphi's list of Asian manufacturing facilities- China and Korea are the other ones- where CFRIs are made.
Jon DeGaynor, business line executive- diesel systems, Delphi, told a press conference today that the company would integrate its Asian manufacturing activities. "We view facilities as a global activity," he added.
The Rs 300 crore (Rs 3 billion) Delphi-TVS plans to invest about Rs 500 crore (Rs 5 billion) over a five-year period to build manufacturing facilities for CFRI, as well as expand capacities for an existing product, rotary pumps. The company said the final capacity for CFRI facility would depend on customer demand.
The Indian plant assumes importance for Delphi as DeGayor estimated that Asia-Pacific would contribute 35 per cent of Delphi's diesel sales by 2008, as against 20 per cent at present.
CFRI has emerged as a key component in the auto industry on account of the popularity of diesel engines in passenger cars. J S Chopra, president, Delphi-TVS, said that by 2010 about 30 per cent of the Indian car market would run on diesel engines, as against a level of about 15 per cent at present.
In Europe, the largest car market in the world, around half the cars are powered by diesel engines. The global average for the same is about 33 per cent, said Chopra.
CFRI, which was first used in cars in 1997 by Alfa Romeo and Mercedes-Benz, has helped the cause of diesel engines because it ensures good mileage while simultaneously cutting down emmissions, said a Delphi-TVS official.
T K Balaji, managing director, Delphi-TVS, forecast that the company's sales would triple in five years. He said that the CFRI supplies would start this year.
The manufacture of CFRI by Delphi-TVS is to be accompanied by higher investment in development activites. The company plans to set up a technical centre at its exisitng facility that would complement current engineering facilities and focus on developing new products.
