Kanpur auto firm decides to expand to defy slowdown fears

At a time when leading automobile manufacturers worldwide are opting for reduced production and cost-cutting measures in the wake of the financial downturn, Kanpur-based JS Automobile (JSA) has announced expansion plans to enter the mini trucks segment, apart from launching a new series of three-wheelers.

After registering a strong presence in the three-wheeler market in Uttar Pradesh, the company will start a new plant with a manufacturing capacity of around 500 vehicles per month in Panki, the industrial area near the city. The plant will produce CNG-based vehicles, under JS-Victoria1000D, CNG3plus1 and CNG5plus1 brands.

JSA Director Suresh Puri told Business Standard that the company is defying all the fears of slowdown as the demand for the existing three-wheeler market in the state is still far from fulfilled.

“We have also started a new plant with a manufacturing capacity of 1,500 three-wheelers to meet the demand. For expansion, we are investing around Rs 200 crore,” he added.

The move is also expected to revive the 50-odd ailing local auto components manufacturing units. The manufacturers supply components to leading companies like Mercedes and Ford worldwide, but in the wake of the slowdown, their exports have been severely hit, forcing most of them to close down.

JSA had been planning to expand for the past six months. “We were monitoring the market situation and decided to start the new plant as it would help us procure the components at economical rates and strengthen our brand presence across the state, even as our competitors are busy withdrawing their market presence,” said Puri.

The major competitors for the company are Tatas’ Piaggio and Mahindra’s Vikram Auto. “Our new model will hit the market in the next six months and we are optimistic by the enthusiasm shown by our dealers,” said Puri.

“Once these two Panki plants become operational, we will shift our attention towards starting a new plant in Uttarakhand,” he added. The company has already bought land for the proposed plant in Dehra Dun. The company has six models of three-wheelers in the market and the launch of two more is further expected to boost its market presence.

The firm has a marginal market presence in Bihar, Jharkhand, Haryana, Rajasthan and Delhi, apart from a strong presence in UP.

At present, all demand is met through the plant at Dadanagar in Kanpur that has a production capacity of around 150 vehicles every month.