Wheels India Ltd, the steel wheel manufacturing arm of TVS group, has entered into a technical arrangement with Japanese steel wheel manufacturer Topy Industries to design and develop steel passenger car wheels for global customers.
Announcing the second-quarter financial results, Srivats Ram, managing director, Wheels India Ltd, said, "In the second quarter, we have entered into a technical agreement with Japanese firm Topy Industries. This comes as an opportunity for us to engage in early development stage of steel passenger car wheels."
The tie-up would help the company to attain the quality standards of the Japanese firm and to add new customers in the global market. Almost 22 per cent of its total turnover comes from steel car wheels for passenger cars.
The company, which has capacity to manufacture wheels for commercial vehicles, passenger cars, tractors for agricultural purposes, construction and mining trucks and air suspension system, is planning to invest Rs 70 crore this fiscal to expand its capacity.
At present, it has a capacity of 13 million wheels per annum and has plans to produce one million wheels per month this year. It is planning to expand capacity to around 15 million wheels a year to serve the needs in next two years. While the investment is planned across the segments, a majority of it would go into the two factories in Chennai, he added.
The company is also working on truck and trailor suspension products which it would launch in the next couple of years. It is also planning a suspension system for ambulances with a long term plan.
The company posted an increase of 113.62 per cent in net profit for the quarter ended September 30, 2011, at Rs 10.98 crore compared to Rs 5.14 crore for the same period of previous fiscal. The revenue stood at Rs 496 crore (Rs 417 crore).
The increase in net profit came from the shift in product mix as well as the company's performance in domestic as against export markets. The company's focus on off-road products in the construction and mining and agriculture sectors has pushed the growth forward, Ram said said.
