Arvin Meritor eyes stake in Tata axles arm

The US auto component giant Arvin Meritor is likely to pick up a strategic stake in Tata Motors subsidiary HV Axles Ltd (HVAL).

A source in the Tata group said a high level delegation of Arvin Meritor had visited the Jamshedpur plant of HVAL in November to discuss the issue.

Meritor is one of the largest vehicle axle manufacturers globally. Besides axles, it has expertise in transmission, clutches, braking systems, drive systems and exhaust systems.

HVAL is a manufacturer of axles for heavy and medium commercial vehicle applications.

Rumours of a likely tie-up between the two had been doing the rounds for some months now. According to sources, Meritor is likely to pick up around 25-30 per cent stake.

"Meritor sees Jamshedpur as one of the global supply base for axles," said a source. The facility of the company is located within the premises of the Tata Motors factory.

A Tata Motors spokesperson, however, said, "We will not comment on the issue.".

Another Tata Motors executive said the subsidiary was actively pursuing opportunities for alliances as well as external customers for growth.

Set up by Tata Motors' heavy axle division at Jamshedpur, HVAL went on stream in March 2000 and has an equity capital of Rs 45 crore. It is a 100 per cent subsidiary of Tata Motors.

The company reported turnover of Rs 145.78 crore in 2004-05 compared with Rs 117 crore in 2003-04. Net profit stood at Rs 42.74 crore in the last fiscal. HVAL is one of the 10 subsidiaries of Tata Motors.

Other subsidiaries of Tata Motors include Telco Construction Equipment Company, Tata Technologies, HV Transmissions, Sheba Properties, Concorde Motors, Tal Manufacturing Solutions and Tata Daewoo Commercial Vehicle Company.