Maruti joins Futaba for exhaust systems

Leading car maker Maruti Udyog (MUL) will set up a company that will sell exhaust system components for automobiles in the country. The Foreign Investment Promotion Board (FIPB) has cleared a proposal to this effect, sources said.

MUL will set up this joint venture company in collaboration with Futaba Industrial of Japan at an investment of Rs 182 crore. Futaba will hold 51 per cent equity in the joint venture company and MUL the rest. The factory will be constructed in Manesar, Haryana and is expected to start operations by September 2008. It will become fully operational by 2010. The joint-venture company will manufacture exhaust pipes, exhaust mufflers and exhaust manifolds primarily for MUL, Suzuki Motor Corporation and associates.

The project had to be approved by the FIPB as Futaba, currently, has a technical collaboration with Mark Exhaust System (MESL) for manufacturing auto components, which is in the same field as the proposed JVC.

MESL has conveyed its no objection to Futaba's JV with MUL. The proposed project would require an investment of approximately Rs 45.90 crore, official sources said.

Futaba is the largest manufacturer of exhaust system components for automobiles in Japan with a market share of 35 per cent. The component manufacturer has been a key supplier to Suzuki Motor Corporation of Japan. It has recently forayed into manufacturing chassis and fuel-related component parts also.