Fiat arm, Krishna Group plan JVs

Italian auto major Fiat SpA's component arm Magneti Marelli has signed two joint venture (JV) agreements with SKH Metal and SKH Sheet Metal Components, both part of the Krishna group, to manufacture automobile exhaust systems.

Both the ventures will be on equal partnership basis although there was a lack of clarity on investment. An announcement in this regard is due on Thursday. SKH Metals' Managing Director Sunandan Kapur confirmed the development but declined to elaborate further.

The JV with SKH Metal will have a manufacturing facility at the Maruti Suzuki Industrial Suppliers Park in Manesar. The exhaust system components designed, produced, assembled and tested here will be used in the production of vehicles for Maruti Suzuki India (MSIL) and Suzuki Motor firms, said an industry source.

The venture with SKH Sheet Metal will be located in the auto cluster at Pune. It will design and produce exhaust systems for Fiat, Tata and other automotive customers from the region.

Exhaust systems including catalytic converters, silencers have become important in the context of likely adoption of Euro IV or Euro V norms for motor emission, strong increase of motor vehicles in the country and resulting environmental concern.

India will adopt the Bharat Stage 4 emission norms, equivalent to Euro IV, by the turn of the decade. Various automobile companies are already working on these platforms.

SKH Metal, formerly known as Mark Auto, was established as a joint venture between Maruti Udyog and the $200 million Krishna group. The JV was bought over by the Krishna group in 2005 and renamed as SKH Metal.

The Krishna group, has interest in manufacturing seating systems, injection- moulded door trims, rear view mirrors, head rest assemblies, arm rest assemblies, roof liners moulded carpets among other interior parts.

Magneti Marelli, designs, produces and markets advanced systems and components for motor vehicles. The ¤ 5 billion group supplies to all the leading carmakers in Europe, the US and the Far East.

Its business areas include powertrain-suspension and shock absorber systems, electronic systems and other service.