Close on the heels of snapping-up German auto parts major Zelter in a Euro 30-m deal, Amtek Auto has now struck a deal with another German auto component maker, Neumayer Tekfor GmbH, for setting up a 50:50 joint venture. The JV is for the manufacture of high precision fractured piston connecting rod assemblies and modules, in India.

Based in Hausach, Germany, Neumayer is part of Euro 380-m (Rs 2,000 crore) Tekfor group and employs 2,200 people. It has eight manufacturing facilities spread across Europe, the US and Brazil. It also manufacture a wide variety of high precision automotive components for the gearbox, chassis, drivelines, engines and other specialised applications.

Sources say that Maruti Udyog has already nominated the JV as a sole supplier for the fractured connecting rod modules for its diesel engine plant, which is being set up at Manesar with an installed capacity of 100,000 engines annually. It will be for the first time that an Indian company will be manufacturing fractured connecting rod with a laser beam fracturing technology, which not only enhances the engine efficiency but also reduces noise level of the engines.

The alliance is part of Amtek's longterm strategy of attaining a global technological edge in the manufacture of fractured connecting rod modules. The JV will be the sole supplier of these components in India and the scope also encompasses joint business development globally. There is also a marketing agreement between Amtek Auto and Neumayer Tekfor under which the latter will use its global network for marketing Amtek's connecting rods in Europe and the Americas.

Diesel engine technology is of strategic importance to Amtek as the number of diesel driven passenger cars is expected to grow to 35-40% of the total passenger car market in India in the next few years. According to company sources, the JV is just the beginning of Amtek's relation with Tekfor and a number of other new projects are under discussion currently.

Amtek is also investing in its forging operations across the country to bring it at par with that of the TekFor's forging facilities. As part of the understanding between Amtek and Tekfor, the latter will provide complete technical knowhow and assistance to the forging operations of Amtek. The JV requires high precision forgings that will be sourced from Amtek's own forging facilities.