Greaves, Piaggio Ink Pact For Vehicles
After a failed courtship with Bajaj Auto, Piaggio Spa of Italy has decided to tie the knot with Thapar group major, Greaves Ltd, for manufacturing three and four wheelers.
After the completion of an ongoing feasibility study, the two partners are likely to enter into a formal agreement on the nature and structure of the proposed relationship.
Size, expected volumes and proposed investments are being worked out in the feasibility study.
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Greaves chairman Shekhar Datta said the possibilities being examined are a separate joint venture or a technology transfer by Piaggio.
The deal is expected to be finalised by December this year, said Datta.
The Italian major will also be sourcing its European requirements for the diesel-driven vehicles from India.
In India, the marketing will be done by Greaves Ltd while overseas marketing will be carried out by Piaggio.
"Piaggio will provide technology for the venture, and it will also make a financial contribution which could be through an equity participation", said Datta. The alliance will be for making passenger and load carrying vehicles for the semi-urban and rural markets.
They could also be converted into utility vehicles, Datta said. The vehicles will be manufactured at the Baramati plant near Pune with more than 1,00,000 vehicles being produced per annum.
"The agreement will be signed, sealed and delivered by the end of December this year", said Datta.
On being asked whether he was taking on Bajaj Auto, which is the biggest player in the segment, he said that he was only responding to market demands.
Net profit increases by 27 per cent
Our Bureau CALCUTTA
Greaves Ltd, the Rs 800-crore engineering arm of the Mumbai-based Thapar group, has registered a 27 per cent increase in net profit to Rs 41.65 crore for the financial year 1996-97. The company's net profit stood at Rs 32.80 crore in 1995-96. Greaves' turnover has gone up by about 10 per cent to Rs 796.1 crore from Rs 723.4 crore in 1995-96.
It has declared a dividend of 32 per cent on its equity shares as against 29 per cent declared in the previous fiscal. Around Rs 14.15 crore is likely to be absorbed in paying the dividend.
The total equity share capital of the company for the previous fiscal was Rs 44.2 crore.
The company's performance is attributed to improved efficiency in its operations and better financial management.
During fiscal 1996-97, Greaves introduced a number of product developments in all its business segments. The company's core competencies include IC engines, diesel 3-wheelers and power transmission systems.
At present, it is the country's largest manufacturer of IC Engines.